Saturday, November 03, 2012

What victims will Smartphones claim?

When television was introduced, initially, there was no impact. Then, there was a seconday impact on our social habits - we stopped visiting relatives and friends as often, lest we disturb their watching Chhayageet or the Sunday movie. Apart from that, the generation gap between children and their parents grew wider - with TV viewing being the commonest friction point.

When Desktop Publishing arrived, for some time, it was a curiosity - because only 2 fonts were available and the software was terribly slow on PCs. But within 3-4 years, jobs of "Cut-and-Paste Artists" at phototypesetting units disappeared totally. Of course, they were replaced by KPO Companies offering Pre-Print Services.

Similarly, when the Internet and mobile telephony was upon us, we did not initially realise the impact. Then several impacts happened:

  • Email went from being an esoteric, nerdy mode of communication, to an absolute essential (What?! You don't have an email account?!) in less than 5 years.
  • The Post Office lost one major source of revenue - post, now pejoratively dubbed "snail-mail" - almost for ever. In the same period of time.
  • Porn - an deluge of it - was upon us. The parents of teens among us either remained blissfully unaware, but kept wondering why their wards had become so withdrawn or rebellious; or wrung their hands with worry about the warping influence that it could have on our kids. Now, it has become so commonplace that few parents, if any, worry so much anymore.
  • When adoption of mobile phones (more or less contemporaneous with the Internet) exploded, the Post Office got another body blow - how many send greeting cards today? We use SMS or MMS or e-Mail. We innovated the "missed call". 
Now, smartphones, phablets and tablets are well and truly upon us. They have already washed away the PDAs - PIM devices that were not mobile phones. Now, I am counting what else has been washed away (at least as far as I am concerned) by the computing revolution that the smartphone represents:
  • No more "mobile stereo music devices" like Walkman, Discman, or Radio. Even iPods are on their way out. 
  • No more radios or even Car FM Radios for music - we can choose what we want to hear on a 16GB USB stick that can carry a zillion songs. And we can get FM Radio on some of our smartphones. 
  • For important news on the go, now, there is Twitter - anything that I really need to know will be on Twitter quicker than I can hear it on radio. 
  • No more wristwatches except as a style statement. 
  • No more alarm clocks. Anyway, I can no longer imagine leaving home without my Google Nexus 7. 
  • If there is a choice, today, I would choose e-Books over physical books. Imagine book that can be read at night with the lights off, without disturbing your spouse! And that does not burden you any more? I am now reading more books than since my college days - due to the sheer convenience. A book often weighs more than a Tablet.  
  • Newspapers and Magazines will die out too. Newsweek, and Martha Graham are two big marquees that have gone online only. There are several online-only publications like Huffington Post (which recently bagged a Pulitzer) and Business Insider.  I am still to wean myself off newspapers, it is too ingrained a habit - but that can happen, very, very soon. Already, I don't remember when I last bought a magazine at a newsstand. Not because I don't read them -  but because I get a host of Indian and foreign newspapers and magazines on Flipboard or Google Current; updated automatically every time I open it. Sameeer and Vineet Jain need to really worry - their huge, profitable franchise is likely to decline, but before they do, almost the entire newspaper industry in India may wither away. 
  • I now use my Netbook (already written off by many as a dodo, but still surprisingly useful and convenient) only to write - and rarely to read. That includes work-related reading as well. So probably, PCs and laptops will fade from my memory. Already, all working in my office have their own tablets and smartphones. They often share documents using Google Drive, which could be done using a Tablet as well. 
  • Much less spending on movies - with smartphones capable of HD video, Teenagers will watch movies in cinema theatres only for the company, or for new movies that they cannot download and watch. For the older generation, it is easier to watch old movies or song clips, or listen to old songs on the Internet; and what can be more convenient than watching it on a tablet in Hi-Def? 
  • The jobs of watchmen and security personnel will disappear - but not so fast - what with cheap DVRs and security cameras with output viewable on a Tab wherever you are, proving to be more efficacious - my friend, an industrialist, keeps tabs on his factory using his Tab over wi-fi or using a SIM-based Internet connection, no matter where he is. He actually caught one of his security guards stealing copper wire by playing back CCTV footage; and nabbed the thief before he reached home!  
Can you add to this list of possible victims of smartphones? 

Wednesday, September 12, 2012

Continued Rise of Evils identified as Culprits of the 2008 Crash

  1. In 2008, in the wake of the financial crisis, assets under management in so-called "retail alternative funds" in the US [a.k.a. alternative investments, and defined to include absolute return, commodities, currency trading, dedicated short bias, equity energy, leveraged strategies (both long and inverse), managed futures, market neutral, multi-strategy alternatives, natural resources, options arbitrage, precious metals, real estate and volatility strategies; but to exclude distressed debt] crashed in the US from $368Bn to $275Bn. However, as a percentage of "all long term retail fund AUM" [defined to include mutual funds, closed-end funds, ETFs and UCITs (Undertakings for Collective Investments in Securities) structures, and excludes limited partnerships and separately managed accounts], it never fell - indeed, the figure of $275Bn in 2008 was 5% of LT Retail Fund AUM in 2008 whereas the bigger figure of $368Bn was 4% of the same figure in 2007. 
  2. From 2009, the share of alternative investments as a percentage of the all long term retail fund AUM started rising once again, boht, in the US, and globally excluding the USand they have been growing @21% CAGR in absolute terms in the US, and at 11% globally excluding the US;  till 2011.
  3. At the same time, several other disturbing parameters have been heading in the "wrong" direction. See the table below, which shows these statistics as they stood  at three different times I have tracked them in my blog. 
  4. Reading this table closely shows that the average American is on the right path (reduced personal debt per citizen; higher GDP per citizen) but the US Government has continued its profligacy with a vengeance (rise in National Debt as % of GDP; Total Debt per Citizen; and US Debt held by Foreign Countries). Just look at the US Total Liabilities and US Interest Burden per citizen from April, 2010 to September, 2011 to see what havoc the US fiscal and monetary policies are wreaking.   
  5. What is worse, the investment bankers are back with a vengeance: as paras 1. and 2. above indicate, and as the figure of Currency and Credit Derivatives in the Table below confirm, what Warren Buffett famously termed as Weapons of Financial Mass Destruction are growing in value at an uncomfortable pace.  Derivative exposures have risen by as much as $91 Trillion (or 6.37 times the US GDP in just 30 months), when they should have been falling
  6. It is time that the US Investment bankers are stopped from selling "innovative" risk-masking derivative products - for the sake of the financial health of the entire world.

Table 1
Parameter 8 Apr 10 26 Jul 11 11 Sep 12
US National Debt as % of US GDP 89% 98% 104%
US National Debt per citizen ($): 41,381 46,619 50,959
US GDP per citizen ($): 46,381 47,488 48,805
US Total Debt per citizen ($): 1,80,484 1,76,113 1,81,307
US Personal Debt per citizen ($): 53,787 51,441 50,132
US Interest Burden per citizen ($): 1,493 11,664 12,343
US Total Assets per citizen ($): 2,34,181 2,43,086 2,96,124
US Total Liabilities per citizen ($): 3,50,054 10,26,974 10,54,522
US Gross Domestic Product ($): 14.333 Tr 14.809 Tr 15.342 Tr
US Debt held by Foreign Countries ($): 3.875 Tr 4.584 Tr 5.376 Tr
Currency and Credit Derivatives ($): 648.975 Tr 611.499 Tr 740.277 Tr

Sources of data: 
Para 1 and 2 above: from "The Mainstreaming of Alternative Investments - Fueling the Next Wave of Growth in Asset Management", a Report by the Financial Services Practice of McKinsey & Co, Sep 2012.
Para 3 : extracted on 11 Sep, 2012 from,
Table 1 above: extracted on dates mentioned in cols 2-4 of table 1 from,  

Saturday, July 28, 2012

NRIs in US: Some Food for Thought

There is a large contingent of “Hindustan Leavers” in the West, in places like the US, Canada, and the UK. In the US, there are probably over a million NRI Dollar-millionaires, in terms of liquid assets. Let us take the case of one such NRI with exactly a million US in liquid savings under his belt.
Such an NRI is either a well-paid salaried professional or a businessman. Either way, these days, the economic environment in the US has turned hostile for both these groups. Business climate has deteriorated significantly in most business sectors; and those still in jobs are facing long periods of zero pay increases, and near-zero lateral shift options.
Property, debt and equity (including through mutual funds) are no longer attractive investment options in the US, with positive returns by no means guaranteed. For many NRIs, their home loans are “underwater”, meaning that the loan outstanding is higher than the value the home will fetch if sold. Even if it is not, home prices are so low that most cannot countenance selling the homes they live in. Those approaching retirement age, say those around 60 years of age, are facing the grim prospect of living on their capital post-retirement, because, the years since 9/11 have been “the lost decade”, with their savings dwindling to half or less what it was worth before that watershed event. So, even if he has unencumbered savings and investments of US $1 Mn or its equivalent, with current earnings of around the same sum, assuming interest earning @3% on savings, they are looking at a net pre-tax annual investment income of no more than $30,000 per annum or $2,500 per month, which is close to the minimum wage in some places in the US. So much for the attractiveness of being a dollar millionaire!
Now assume that the same person chucks up everything and brings his $1Mn to India. He gets Rs.5.6 crores. For Rs.0.6 crores, he can buy a comfortable, lavish home of his choice in any place other than in Greater Mumbai (Mumbai-Navi Mumbai-Thane) and NCR (Delhi-Rohtak-Gurgaon-Noida). If he wants to avoid traffic jams, pollution and bad roads, he needs to give a few other cities, like Bangalore and Chennai a miss. (Think Mysore, Surat, Coimbatore, Chandigarh) The remaining Rs.5 crores, he can invest in nearly risk-free securities at no less than 8.5% per annum. Even allowing for average rate of tax @28%, he will be able to earn after-tax income of over Rs.250,000 per month – a princely sum that takes him into the wealthiest 1% of India's population! At a cost of not much more than Rs.10,000 per month, a mere 4% of his monthly after-tax income, he can get all the domestic help he needs, to live a cosy, pampered life. For a few Lakhs more, they can get entry into the most exclusive clubs in any town – a passport to a genteel life of leisure. He has the chance of investing almost all his spare cash in gold (taking Nouriel Roubini's advice to heart) and thereby reduce his tax bill (capital gains for gold held for over 3 years is taxed at concessional rate).
Indeed, he will find that while, in the US, he can look forward to only bad news, and being able to barely make ends meet financially, in India, he is positively rich – and concomitantly, has a risk appetite and margin for losses that allows him to earn superior returns through judicious investment in equity shares.
So then, what is stopping a reverse India-bound exodus of rich NRIs? 
  • First and probably foremost, inertia and resistance to change. They have become telephonically mobile but geographically immobile! But there is evidence that many are moving when they see the light, rather than waiting to feel the heat of a receding economy.
  • Second, many of them think that India means Mumbai or Delhi; the rest of India does not exist. 
  • Third, many cite unwillingness of children to move to India. That should not be a problem for the "empty nest" stage NRIs. 
  • Fourth, they simply haven't realised how cheap the Indian rupee has become; and how this changes the scenario materially. This, juxtaposed with the fact that India is among the few countries where business sentiment continues to be buoyant, with several attractive investment options, offers a compelling proposition: choose India as a retirement destination! 
  • Indeed, some who are reluctant to move lock, stock and barrel, can simply use India as a waiting room to wait out the recession – and then return to their locked up homes when the US economy looks up again. There is no need to give up US citizenship or green card. All you need is a PIO card! 

Good idea, don't you think?  

Saturday, July 14, 2012

Gender, Privacy and Ethics

Long back, I had blogged about why, when it came to procreation, people are seduced by technology to sally forth into uncharted moral and legal waters, instead of simply accepting the morally and legally acceptable solution called adoption.

We are now finding a similar set of dilemmas coming into focus thanks to the Pinki Pramanik case - that of the concept of gender and its intersection (or shall we say, collision?) with rights to privacy and our sense of right and wrong (ethics and morality). Here, too, a simple solution exists.

Pinki Pramanik thinks she is a lady. That should be enough for the rest of us to treat her as one. If our law allows ladies to be exempt from being punished for rape, that is a defect of our law - and anyone consistently claiming to be a lady should be allowed the benefit of such a law.

If our culture can tolerate, and indeed assign roles (however peripheral) to transgenders or cross-dressers in our culture, and give them the right to proudly say that they are hijras, and even give Shikandi (who thought she was a lady), the right to be treated in battle as a lady in the Mahabharata, there is no reason why, when it comes to a case like Pinki, she should be harassed and humiliated.  She should be treated as a person with due solicitousness - just as we treat the differently-abled in society.

If it is proved that Pinki has committed violence, she should definitely be punished for it. But, here again, the allegation is a private criminal complaint, and the only person who has the right (locus standi)  to prosecute Pinki for the offence alleged is her partner who alleges the violence. Hopefully, the decision will go though without the taint of the controversy about Pinki's gender clouding the decision, because that is really a non-issue. (In fact, just as I get ready to post this entry that has been a few days in the draft stage, comes the news that Pinki's partner has admitted to have been spurred to make the rape and masculinity charges by a person who was engaged in a bitter property dispute with Pinki). Whatever is the truth, what becomes clear is that Pinki's suffering was unnecessary and avoidable. She has fallen victim to the general intolerance of ambiguity in our Society. Everything has to be right or wrong; black or white - no space for grey!

In sports, at the international level, the case of Caster Semenya has brought out the difficulty of "proving" gender. Instead of learning lessons from that episode, we are going headlong into committing the same mistake, forgetting that mandated gender testing is an affront to the target's right to privacy and human rights.

On a slightly different note, Bidhan Barua's case - of his right to undergo gender-altering surgeries - has also got its fair share of headlines. Here too, the simple  solution as I see it, is to allow people like Bidhan do what he/she wants - like we do not raise eyebrows for cases of Botox shots for eliminating wrinkles and crow's feet.

Thursday, July 05, 2012

Oriental Insurance Rejects Mediclaim Claim Because Hospital Reduced Bill !

In November, 2011, I had written about the maid in my office who met with a freak accident and lost her eye when someone chucked a stone that hit her while she was travelling by Central Railway local train. This is a sickeningly sad and cruel sequel to this poignant story.  
Darshana was admitted to Bombay Hospital where she underwent re-constructive plastic surgery on her nose bridge that was shattered; and on her eye, where the entire socket was crushed. She had to stay indoors for almost a month after she was discharged from hospital, wearing dark glasses. 
During this convalescence period, she remembered that she had paid for a Mediclaim policy and, after some looking around, was relieved to find that it was valid and covered upto Rs.50,000 of medical expenses. When it came up for renewal, she somehow scrabbled around for money and paid the premium and renewed it, as she now realised more acutely the value of health insurance. 
Darshana had so much goodwill with her several employers that they pooled money and helped her pay most of her hospital and post-hospitalisation costs. The hospital bill came to Rs.1,17,090 and, after explaining the circumstances and pleading for a lower bill, the doctor and surgeons' fees were waived, and a final bill of (-)48,022 was issued representing the reduced charges. She managed to collect the Rs.69,068 needed to pay off her hospital bill. 
Barely three months later, Darshana's husband died. Now, she was required to be the sole breadwinner for her aged mother and 11-year-old son. 

Now let us get back to the saga of her Mediclaim policy with Oriental. She managed to file her claim in respect of the policy about a month after the accident. The TPA (MD India) first rejected her claim saying that she had not intimated them within 24 hours of the accident. We explained her circumstances to Oriental Insurance, and the fact that she did not know that the insurance company needed to be intimated immediately, and the technical defect was condoned. 
We then went through a chain of correspondence with the TPA, and though we responded promptly within 2-4 days, the next letter from the TPA always came after about a month.  Each time, some small point or the other was raised, and we clarified, or did the needful. After almost 6 months, during which they sent an investigator to meet Darshana and also sent an investigator to Bombay Hospital to check the genuineness of the bills, on July 3rd, 2012, the TPA of Oriental issued us a copy of a Pre-Repudiation Statement. They gave two reasons for rejecting the claim : 
(1) the exact amount of the claim was not mentioned in the claim form filed by Darshana; and 
(2) the final bill was not  submitted; and that only an interim bill was submitted. 
Since our policy cover was Rs.50,000 and there were NIL exclusions, obviously, if an expense of Rs.69,068 was spent, the claim amount would be Rs.50,000. This is also obvious from the policy document itself! Hence, the first ground of repudiation was a lame, hypertechnical ground. 
The second ground was a patent untruth as Darshana had submitted the original final bill. In any case, we emailed them a copy of the same. 
When we spoke to the MD India Head for Thane, Mr Pallaw Saxena,  and the officer (Ms Rema) at Oriental Insurance, they agreed to consider our submissions. In just 2 more days, we get an email telling us that the claim has been rejected - for a new reason - that the Final Bill sum is negative. By citing the Final Bill, they have admitted that the second ground in the Pre-Repudiation Statement was an untruth!  Worse, effectively, they have rejected the genuine claim because the Hospital reduced its bill! 
We explained the obvious to both, Mr Saxena, and Mr Adhav, the Divisional Manager of Oriental Insurance in Thane - that these two bills were running bills, and the arithmetic sum of these bills was the same as the receipt amount - and the receipt mentioned the two bill nos that the payment pertained to. Yet, as of today, a third blow has hit Darshana - her genuine, valid health insurance claim has been rejected. Of course, I await the formal letter from oriental Insurance, but going by the unhelpfulness of the Oriental Insurance people, I do not expect a reversal of decision, going against the TPA's (dishonest) rejection of claim. 
Now we have to find out what grievance redressal mechanism is appropriate. Grievance Cell of Oriental? Ombudsman? IRDA? Consumer Protection? Which forum is appropriate? In which order? Are any of them mutually exclusive?  What are the next steps? Go to the Press? So many questions; and no clear answers. Need advice. Anyone who reads this and can advise, please tell us what to do next.  If you know anyone who can help with advice, please share this with them. I have already begun the process by writing to the Chief Manager Customer Services Dept, of Oriental Insurance. 
For whatever it is worth, I am uploading the scans of the Insurance Policy, the two bills and receipt of Bombay Hospital and the Pre-Repudiation Statement of the TPA. These documents are sufficient  to justify Darshana's claim, and you can see for yourself the unfairness of it all.  
After our insistent follow-ups, it has reached a stage where both, Mr Adhav of Oriental Insurance and Mr Saxena of MD India are not picking up our phone calls. 

PS: Update:  I am glad to report that since I wrote this entry, the TPA has quietly paid the claim, with not so much as an explanation for the change of heart. The amount has been credited to the lady's bank account today - Jul 28, 2012.

Pre-Repudiation Statement 
First Page of Mediclaim Policy 

Second Page of Mediclaim Policy

Final Bill of Bombay Hospital

Interim Bill of Bombay Hospital 

Receipt of Bombay Hospital - Note the 2 Bill Nos to which the Receipt pertains

Thursday, June 14, 2012

Intellectual Ventures (or Vultures?)

Intellectual Ventures (IV) is a venture that mostly buys up an ever-growing collection of patents. It invites others to pay a membership fee and get “membership” of this collection for a heavy one-time fee, sometimes in hundreds of millions of dollars, which gives them:
  • the right to license or purchase any patent from its collection to use as defense in battles against its rivals
  • the right to not have the venture use its patents against the member
  • the right to get a share of membership fees paid by every future member. Thus, there is an automatic incentive to join early, as in any multi-level pyramid scheme.
Nowadays, it is observed that IV has taken to selling some patents from their huge collection. This means that if they want to start a battle, they make sure that they never fight in their own name. This fact is shrouded behind a byzantine maze of shell companies so that, invariably, the entity that fights is an unknown entity that has incidentally come to own the patents required to fight. This arrangement with the shell company is suspected to have a “back end” so that at least some of the benefits that may accrue from any battle using the patents sold by IV to the remote entity, flows back to IV.
Intellectual Ventures's modus operandi includes putting on a front where they offer the public through overawed or otherwise unskeptical press reporters, a glimpse of its huge collection of patents. They take reporters around its innovation laboratories where they spend millions to “encourage innovation”. IV keeps drilling home the message that they do not want to fight; indeed, they strive to avoid battles. They only help their membership fee paying members to use its collection of patents for offense in battles against their business rivals. Thus, this venture gives out patents on hire to its members who have insufficient or no patents in their own personal collection. They also put in a friendly word with their members' business rivals, when they think it might help, to help out their members. They do not like to talk about their members, but large corporations like Microsoft and Verizon are known to be early members of this collection. Their members also include tiny startups like Vlingo who need (and hence bought) patents from IV's collection to use to fight their business rivals. Verizon also is known to have bought some patents in its battle against TiVo.

Now there are some who have a completely different view of Intellectual Ventures. Their view can be easily be understood with a few words being replaced by words that differ slightly in meaning. They suggest the following search-and-replace commands be run on the paragraphs above:

Search for Replace with
membership protection
member protectee
patent weapon
license borrow
defense offense
membership fee protection money
collection arsenal
battles lawsuits
fight sue

Of course, there are still others who recommend another search-and-replace that is suggested in the title of this post. What do you think? Comments welcome.

Monday, April 02, 2012

Global Power Shift

This is just a series of observations that support my idea that we are living in what, in a few decades, will be seen as tumultous times.
Recently, there was a news item that stated that by 2020, China will become a larger economy than the US; and by 2050, India will top even China, leaving the US a distant third. This is not someone's wishful thinking, but just the magic of compounding – of economic growth, rather than of your money in a bank.
Today, we are all living at the crossroads of history. A subtle power shift, significantly visible in time frames of decades, but barely perceptible at the time frame level of a day or a week, is happening all the time. Witness the following:
  • The Arab Spring happened over a period of months and still seems dramatic. I doubt if the spring has completely spent itself. It is not yet all cool in Syria and Egypt, and it may yet erupt again in some other nation(s).
  • Technology laughs at national and geographic borders. Accountability and clean governance pressures were earlier driven within each nation's power centres, laterally. However, now there are vertical pressures that cross national borders earily – thanks to telecom, internet, satellite broadcasting and global moneychangers (both, traders and speculators).
  • Unregulated or unpoliced space soon becomes populated with groups that thrive on chaos and absence of regulation. Witness Somalia, Sudan, South Sudan, etc. to see the truth of this.
  • Unregulated pockets in otherwise regulated economies also give birth to chaos. While this is not to be taken as an approval of the concept of a police state, it is sobering to hear Paddy Ashdown cite a fact that 60% of the $4M that funded the 9/11 bombings passed through the WTC itself!
  • Now, the enemy is within each country. Thus, for properly defending a country, the defence ministry may need to speak to the Health ministry (to protect against pandemics); Ministry of Commerce and Industry (the hi-tech infrastructure of the country is sensitive and vulnerable to attack), Home Affairs (to track infiltrators), and Transportation (Air/ ship/ road security). Defending our borders is just not enough.
  • The maximum vulnerability is at all “interconnection points” (airports, docks, bus and train terminals). So defending at such points necessarily means overlap in responsibilities and powers. Hence, working with others efficiently is a capability all need to develop.
  • Defence co-operation is not enough. Nations and people living in them need to realize that war is an immensely expensive zero-sum game that can go on infintely to their collective detriment. Only then can long-festering disputes cool down sufficiently to permit normal life.
  • In 1945, when WW-II ended, there were about 100 countries. Today, there are nearly 200. We are adding almost 1.5 new  countries a year on an average over the last 67 years.  At the same, time, we have witnessed European countries lowering the borders and becoming a single currency area (that initiative is arguably in the endgame stage already).
  • Siberia has such inclement weather that in the Far East province of Russia (area double of India) less than 60 Lakh people live. Greater Mumbai has double that population! However, it is a source of power for Russia – most of its natural gas and oil is sourced from this vast area. Surprisingly, this is a source of power for China too! Global warming has given rise to vast wheat fields in Siberia – but there is no one in Russia to feed. Russia's population is shrinking. But we see that some 600,000 Chinese migrate to Siberia, cultivate wheat during the summer on vast leased farm tracts, and come back home every year. This wheat feeds a good proportion of the Chinese population.
  • China is controlling a larger and larger part of the world – without firing a shot. They are, quite literally, either buying them up, or colonizing through sheer numbers of immigrants. They are “partnering for prosperity” with several poorer countries, notably in Africa. Thereby, it is creating a China-centric circle of influence that rivals that of the US already. China has trade relationships with Korea, Japan and other countries in the neighborhood, and lower tariffs for poorer countries. In Singapore, Vietnam and Malaysia, the ethnic Chinese population is a significant, loosely united power bloc. In BRICS and in the Asian Free Trade Zone, China is assuming an increasingly dominant role. For example, on Iran, both China and Russia have vetoed UN Resolutions sponsored by the US for increased sanctions. China is still the largest customer of Iranian oil, with India being second.
  • Chinese yuan is threatens to emerge as an alternative reserve currency in addition to the dollar and euro, which (when, not if, China can get away with it) will deflate the US balloon much faster than one can imagine. When that happens, the US will be awash (not overnight, but over a finite period of, say, 3 years) with inflation of  the trillion dollars of bonds that China won't need. Thus, the US seems poised to deteriorate as a global power. Inflation robs from the poor, and shifts even more economic power to the rich, so it will exacerbate social tensions in the US, as the feeling is already rife that the US bends backwards to accommodate the rich, at the cost of the poor. The recent BRICS meet discussed this concept, but shied away from pushing immediately for it. If, and when, yuan gets adopted as an alternative reserve currency, the power shift will accelerate.
I intend to develop this line of thinking further in coming days and weeks. I welcome inputs in the form of comments from anyone who has more to contribute to this line of thinking.

Thursday, March 15, 2012


No, it is not something bad, like dysfunctional or dyslexia. It is not a medicine either. A few of us, barring chemistry freaks, may know this from the Periodic Table of Elements, part of a group called Lanthanides. It is an element, like Iron, or Copper. Except that the world manufactures (from natural ores) only about 100 tonnes per annum of this substance. So it is rarer than gold, literally speaking. But strangely, currently worth much less than its weight in gold, at close to $2,500 per kg. Gold is many, many times costlier. So what?
China makes 99 tonnes out of that 100 tonnes. So what? China has restricted its export, along with a clutch of similar improbably named elements collectively called as rare earth metals. China has only 12 years' worth of output (estimated) left in the clay mines that are the source of the ore. Naturally, China wants to conserve its reserves for its own use, and have clamped export limits. The United States, as always, wants China to ease these export restrictions, going to the extent of filing a WTO complaint against China.
Strangely, China has 35% of world reserves but accounts for 97% of current world production of rare earth metal oxides! And guess what, USA has significant rare earth reserves (1/3rd of China's according to the figures put out by the US Geological Survey's Mineral Commodity Summaries, January 2010 ) that it is currently not exploiting at all. Indeed, the report notes that “Bastnäsite deposits in China and the United States constitute the largest percentage of the world’s rare-earth economic resources ”. Molycorp Minerals, a mining company, is even as I write this, engaged in a fight with the US Government to get one of its mines re-opened, lying closed since 2002. Australia and the CIS countries also have significant reserves that are currently almost not utilised at all. Why so? The answer may lie in the genesis of the name: Dysprosium is derived from the Greek “dysprositos” that means hard-to-get-at!
Toyota requires 100 grammes per car of this substance to make the drive motors for its hybrid car, Prius. The entire world's current output would be sufficient for only a million hybrid cars. But then, they are not the only guys vying for the substance.
It is used in almost all mobile phones, flat screen TVs and computer monitors, nuclear reactor fuel rods, magnetomechanical sensors, actuators, automotive catalytic converters, high-precision liquid fuel injectors and acoustic and ultrasonic transducers (don't worry about what some of these things are or do – suffice it to say that they generate demand for Dysprosium). Wind power generators require it, as do hard disks. High-intensity commercial lighting and lasers use an alloy including this.
Can we manufacture it synthetically? Not yet! So the world has no alternative to focus on commercializing the existing reserves, and ore-processing capacity.
What if the world runs out of Dysprosium? We can still make do, but any substitutes will most likely be heavier and more inefficient with respect to magnetic properties. So no more sleek iPhones, tablets, netbooks. Non-renewable (nuclear, wind) energy will become costlier. No Prius. Unless we learn to make it synthetically, or find much more efficient magnets not using Dysprosium. 

Monday, March 12, 2012

The Horror in Panjwai ... and the last 9 years reviewed

It all began with Bush declaring imperiously, "If you're not with us, you're with them".

And then began the sordid, shameful saga in 2003 that has yet to end. Of two more wars that should never have happened. Of a war being waged on a common noun.

It began by the US occupying high moral ground. Of 3000+ innocent victims of terror1. But it led to documented deaths of well over 105,000+ Iraqis. Several times more people injured or violently displaced from their homes. Lancet's 2nd peer-reviewed study of Iraqi casualties indicated 654,965 excess deaths, or 2.5% of Iraq's population. That was in 2006. In 2007, the Opinion Research Business, an independent polling agency located in London, published estimates of the total war casualties in Iraq since the US-led invasion of Iraq in 200 at over 1.2 million deaths (1,220,580). Of these, 48% died from a gunshot wound, 20% from the impact of a car bomb, 9% from aerial bombardment, 6% as a result of an accident and 6% from another blast/ordnance. As of Jan, 2008, this estimate had been revised to 1,033,000. Of course, such findings are contested – none can ever claim accuracy. But then, you get the drift. How many Afghani and Iraqi Arabs should die for each American who died in the WTC Tower crash? All this toll in a war started on the basis of what proved to be a pack of lies told to the whole world!

A country that was ruled ruthlessly for 34 years by a dictator was thrown from that frying pan into an intense fire of an internecine escalating spiral of senseless violence. The situation today is such that now many Iraqis must yearn for the days under a tyrant called Saddam.

Since 2003 when Saddam was deposed by an intense military offensive, death has mostly rained down on Iraq from the air, where no American lives can be lost. When at last the Americans sent in their ground troops, they first created a min-America within Iraq – the heavily fortified Green Zone. And then let loose their maniacs and perverts. Like Lynndie England and Charles Graner in Abu Ghraib, a prison housing 7,500 prisoners in 2004. After their unpardonable acts of perversion, they were escorted safely to the US, where Lynndie gave safe birth to a child conceived in the midst of perversion, and then spent a leisurely 3 years in a swank military prison in the balmy climate of California spread over 19,000 sq mts and meant to house only 400 female prisoners. She served in the prison kitchen as punishment, and lived in that prison for exactly 521 days till she was paroled till her 3-year sentence was over. Now she lives in West Virginia, bringing up her child. Still not repentant for the horrors she took part in. And Graner? He was sentenced to 10 years, but was released in August, 2011 after serving only 6.5 years in a new prison building in Kansas meant for 515 prisoners in a quiet area spread over 51 acres where the bright cells have doors and windows, but no bars. Both were dishonorably discharged – forget the dishonor, discharge is what they probably wanted and got, anyway.

This is what an American soldier gets for visiting unspeakable horrors on thousands of prisoners. Definitely what the US soldier who went on a rampage yesterday in the original war-on-terror theatre, Afghanistan, must have mulled as infinitely preferable to the hell-hole that Afghanistan has become.

Let us go fast forward over the other horrors – the peeing on bodies of dead Taliban fighters; the killing of 24 Pakistani soldiers and several hundred civilians through unmanned drone attacks; the random killing of defenceless civilians including a Reuters cameraman in Baghdad by shooting through Apache helicopter gun-sight; the shoot-the-messenger reaction in charging Bradley Manning for leaking this evidence to WikiLeaks; the desecration and burning of copies of the Koran; and so many others – and come straight to yesterday's horror at Panjwai in rural Afghanistan. What happened? 

An American on Afghan soil walks up in the dead of night and shoots and kills 16 Afghan civilians point-blank and coolly walks away. He is arrested – not by Afghan police, but by the NATO forces! 

Now, being a US citizen, he will be tried and brought to justice. In American. In American style. In a closed military court, like England and Graner. In camera, and not in a public trial. That too, many months or years after the public has forgotten this horror. And then, the judgment of the military court will be classified, and not released. And this soldier not hanged, but sentenced to 10-15 years in a swank, comfortable prison, if he is unlucky. And given a dishonorable discharge from the Armed Forces. And paroled after a few years. So he can go back to his family. And live happily or unhappily ever after. With only his conscience to trouble him. If he has one, that is.

Obama consoles Karzai, and not the people who are bereaved so suddenly; and senselessly. Not a month ago, he ducked out of sight and refuses to apologize for the Koran burnings. Directing the NATO commander to do that instead. The same President who did not cringe from the cameras after the killing of Osama bin Laden on foreign soil, in flagrant violation of sovereignty of a nation. Is that the face of a Nobel Peace Prize winner that we see?

What about the US Government? Thanks to its formidable spin doctors and the twin forces of powers to conceal the truth and a well-oiled propaganda machine to project a lie as the truth, and of course, a credulous population, it will still manage to hold forth and pontificate against human rights abuses elsewhere in the world. Like it managed to make their shameful retreat from a war that they lost abjectly, secretly under cover of darkness, and then look like a great achievement.

Now I think I begin to understand the depth of loathing that Arabs have for Americans. Loathing not just because of their despicable acts. But in large measure due to the Americans' deep-seated hypocrisy.

1 Even this is being disputed by documentaries like Fahrenheit 911 by Michael Moore and Loose Change 9/11

Thursday, February 16, 2012

India's Elections: What can Others Learn from Them?

Today, we had municipal council elections in Mumbai and Thane. I went out to the polling booth around 9 am, and was out by 9:10, after going through the process of
  • identifying myself (I showed my passport, but a driving licence, election ID card, or a PAN card (income-tax identification) would have done as well; and in later elections, a vast number may vote on the strength of the Unique biometric identification system that is being rolled out on a massive scale)
  • getting the blob of indelible ink on my fingers, so that I cannot vote more than once, and then
  • selecting two candidates - one female and one male, for our municipal ward on an Electronic Voting Machine (EVM).
Some observations:
First, the process was super-smooth.
Second, the counting is such a smooth process that oncce the EVMs from all over the ward are assembled in one place, the counting of votes and announcing of results would take a shorter time than it took me to write this piece.
Third, there would be no arguments about the count, even if the difference was in single digits. A welcome change from the ridiculous farce that the Florida count in George W's Presidential election against Al Gore just over a decade ago, in the world's most powerful and tech-savvy democracy. One day, India's super-efficient Election Commission (EC) will probably become a profit centre - taking up outsourced election management deals.
Fourth, the EVMs are a wonder of hardiness and simplicity. Hi-tech, yet low-cost. Easy to configure, easy to understand, they have proved themselves time and again in hugely different climate zones, and have reduced the cost of election management by an order of magnitude, with lesser challenges to election results, and lesser effort and time for counting. EVMs are equipped with software that is deceptively sophisticated - for example, I have read somewhere that the EVM is configured so that at least 15 seconds need to elapse before the next vote is registered and announced by an audible long beep. This makes mass-voting by goons a time-consuming task - if the 15-second limit is breached more than twice in succession, the EVM locks itself up, and can only be unlocked by empowered EC officers.

Lots to learn from India's conduct of that great ritual of democracy, called elections, don't you think?