BEST Bus - Recession & Bailout Explained at its "BEST"

Recession - the term which held hostage the newpapers for a long time seems to be on its way out. I am carefully using my words, because these economic terms never follow predictions. It seems that recession is on its way out, but many are still skeptical about the same. Fuelled by increased government spending & stimulus packages, the industry has shown signs of recovery, but many experts still believe we are still not out of the blocks.

Here is a small analogy for you all... Imagine the following...

BEST Bus - Economy of America

Conductor of the Bus - Government of USA / Federal bank

Driver of the Bus - Fundamentals of the Country

Speed of the Bus - GDP growth

Passengers on the Bus - People of the country

Confused.. Please bear with me.. things will get clearer as we discuss further.. :)

BEST bus drives its way through ups & downs on the road, makes stops & depicts the journey from underdeveloped to developed state of economy. Pre-recession period can be attributed to BEST bus being running on Western Express Highway, growing at great speed. Everything is running fine, somewhere down the line the BEST administration starts offering tickets on Credit. The trend comes in vogue & most of people stop carrying cash & board the buses with credit cards..

Somewhere down the line, credit buildup becomes unmanageable, the speed of the BEST bus slows down. GDP growth falls, liquidity gets squeezed out of the system. The conductor doesnt have much cash in its kitty.. declining revenues, & expenses on the BEST adminnistration the same.. Here comes the recession season into the picture..

Now visualize some people in the bus with bad credit cards on their pockets.. the credit cards not accepted by the BEST conductor.. but still they have to purchase the tickets..Now comes the case of bailout... the conductor on the bus gets its cash from the passengers on the bus who purchase the tickets in cash..ie... taxpayers of the economy.

Some who could not impress the conductor with their credentials.. had to get down from the bus..i.e. file for bankruptcy.. e.g- Lehmann Brothers & many other banks..

Some who could impress the conductor.. were bailed out. given credit by the conductor.. allowed to stay on the bus.. e.g- Citibank & may others.. From where does this bailout money come from -- obiviously from the cash from taxpayers...

Will the bailed people pay back to the conductor ?? - Presently there seems hope that they will pay back.. if they do.. the conductor can be credited to have done a extraordinary job.

This type of bailout approach comes in from the keysenian economics.. which says that government can intervene & change the course of the economy growth & cyclical nature of the economy can be diluted so as to make the impacts of the cycles in the economy bearable..

There could be many anamolies in the analogy assumed here, but for the sake of understanding, i think explains the "Recession & Bailout" in the "BEST" possible way... :)

Please do drop in with your comments & also let me know what you think of the "BEST" buses ... :)

Pune Festival - Economics at its best.. !!!

Wow, wat a feeling, visiting Pune after a long lull of about 7 years. Much has changed for the city, & i can say for the better. The environment, the vibrations, the warmth of the puneiets is just an awesome feeling.

While having a good bedtea on a lazy saturday morning, i noticed an ad in the Times of India about the Pankaj Udhas live performance at Poona club later that evening. I recently had queiried the rates for the Jagjit Singh's concert to be held in Mumbai on 28th of this month, the rates were in the range of Rs. 1000 - 3000 per person. Under the same impression I thought that the rates for the Pankaj Udhas concert would be in the same range as that of jagjit singh's one. But to my surprise, the tickets were complimentary & one had to just collect the passes from the TOI office in Pune, that too Free !!!!!!!

Now the details of the concert..
- Live concert in the open grounds of Poona Club
- Supported by Times Music
- Part of the ongoing Times Pune Festival (13th Feb - 21st Feb)

Now the economics of the free passes.. (couldnt help myself, had to find the reasons for the free passes :P)
Just anlayse the income sources of the stakeholders in the concert
1) Pankaj Udhas - income from albums & live shows
2) Poona Club - traditional club on lines of British culture, which fosters socialising for people along with sports, games, restaurant & relaxing facilities
3) Times of India - Majorly from Ads, classifieds..

Rate differentials which times group enjoys is interesting to note

Times group - charges average price of 300-400 Rs per sq.cm of space (varies with spots one wants to book - e.g, front page, somewhere in middle of the paper etc.). On the other hand, competitors for times group - charge somewhere around 100-200 Rs per sq.cm. A price differential of about 200Rs. on average on per sq.cm base is huge advantage.

Now coming back to economics of the free passes -

1) Pankaj Udhas - in contract with Times Music for some shows around major cities in India. Also, with free passes means, a full house is almost guaranteed & then he has the opportunity to appeal to larger mass, with new albums & create a branding for himself. Totally win-win situation for Pankaj Udhas.
2) Poona Club - renting the playground in the night, is no big deal for Poona club. Most of the weekends the playground is unused during the nights. The advantage for Poona Club comes in the manner, that its facilities are experienced by huge crowds & some guests are also invited from TOI side, which can be prospective members for the club.
3) Times of India - how can it enjoy such a differential margin in ad rates ?? The answer is plain & simple. With such festivals & free passes the brand is solified in the minds of the public. There is a very simple funda in advertising, gather the stars for an event, which will attract people Once you attract eyeballs - advertisors are bound to be attracted. Thats what Times group is playing on.

What precipitates here is synergy effect for all stakeholders. Finally the people - they are also happy, or can i say more than happy. One gets to experience the facilities of Poona Club, listent to mesmerizing ghazals from Pankaj udhas & that too on a saturday Evening - & most importantly absolutely free.. free... free..

I must admit, i myself enjoyed the concert., i was really awesome.. One key takeaway from this whole episode is that everybody is happy. All stakehholders have a win-win scenario in this case.
I thought,, i would share these things with u all, & any comments or more inputs on the same.. most welcome.. :)

Money - Is it that important ??

Money, paisa, hari-patti, dhan, laxmi.. etc.. many different names are existing. But has one realized the importance of the same ?

How important is money for you ?

How much money is sufficient ?

& most basic question - Is it that important ?

I learned in my maths class during college days - about probability.

Its very simple to understand -

Probability of an event occuring = '1' - if its a certainity that event will occur

Probability of an event occuring = '0' - if its a totally certain that event will not occur

If a event with probability = '0' occurs than its news, breaking news if i may say.

(For e.g. - Probability that Manmohan Singh declares national holiday for 5 days - highly uncertain - probability = '0', but if it does happen, than its real big information, big news - "Important News")

Similarly for any event with probability = '1', and the event doesnt occur, then it becomes big news, information... breaking news..- "Important News"!!!!!!

The point i want to drive home is that.. money is the most common thing in this world, everybody has it. If one has money, its no news nowadays.. but u mention the amount of money, it does matter. Everybody has it, only difference is the amount which is held. I can understand if one gives importance to sumthing which is quite uncommon, & everybody wants to own it. For e.g. A mercedes, ferrari, etc.. are things which are not very common, and hence if somebody owns it, thats news..!!!

Importance is thus directly proportinal to uncommonality or uncertainity. Higher the uncertainity or uncommanality more is the importance, same is the case with things which one can get in lieu of money. The fact of the matter, we give importance to the things which we can own, buy, lease, experience or rent using money. Its implied importance for money, if i may say. There are many ways by which one can get money (i have not mentioned earn :P) & similarly many ways one can loose it too. More & more people now-a-days are not bothered by the method or way by which one gets money. What they want is money..!!!!. Only Money. This mentality leads to very complicated situation in the social society. One should understand that the method used to get money dictates the flow of future money. For e.g. one can sell an sub-quality equipment to a customer making high claims about quality, but the fact is it wont foster growth of future money. Somewhere down the line the seller will suffer.

Our religious & social backgrounds in India advocate satisfaction as the prime driver of happiness, but more & more people are forgetting this strong fundamental & following the so called "important" thing, i.e. money. People give so many sacrifices, relating to health, love, family, friends etc.. only for getting money. Is it worth all those sacrifices ??. Most of us run after compensation, it is a rite word used, one is compensated for the sacrifices he makes..

Again that basic question pops up - Money - Is it that important.. ???

Please do drop in with your comments.. Thnx..

NITIE - Kuch naa Karne ka Afsos

It has just been few days.. that I have been out of NITIE - (National Institute of Industrial Engineering, Mumbai).. but it seems that decades have passed on. For people, hearing about NITIE for 1st time - important piece of information for them is that NITIE is ranked constantly in top 10 bschools in India.

Leaving aside the Bschool & academic part, there are many other things attached to NITIE. Being away from NITIE, i have realized the pain of not been able to do things which i should have in NITIE. About 18 months of my life, along with PAPCO members went away in search of answers to the question of "The Placement" for the batch.. may it be for senior, junior, peer batch & of course ones own.

One silver-lining in the whole stint of mine at NITIE, is the precious & priceless friends i have made. These are friends, friends for life infact. Friends which have been with me through thick & thin, ones who know me in & out.

"Zindagi mai to tarah ke afsos hote hai, ek kuch karne ka afsos aur ek kuch naa karne ka.."

I am a victim of the second kind of "afsos" :(

Looking back at NITIE life, it seems quite a few things went begging. I had plans for many things but it just didn't work out, or one may say i didn;t allow it to work. For example:-

1) Win atleast one of the SCM case studies.

2) Watch out all available media on DC++ in NITIE.

3) Hang out with friends for two or three day trip to any location outside mumbai.

4) Reading out all the books in the library

5) Get a paper published in technical journal

6) Concentrate on health - go jogging, or swimming etc..

and many other things.. its long list.. (Blogger will clip the list if i expand it more)

The fact of the matter is "Kuch naa karne ka afsos hai" & will stay for some long time to come.

One suggestion to people who are still enjoying the facilities of NITIE, live your life out in available time in the institute. Study, play, hang-out, sleep etc.. do anything & everything.. because the "afsos" i am talking about is very difficult to overcome.

All is not lost, & I am trying to do all things i can in the 4 months available to me, before i get in the corporate jungle. Wish me luck for the same.. & kuch karo... :)

Astonishing Facts

Past few days my house is under renovation. Its a painful thing i must say, even more so if u are the ones living in the same house. The workers which come for the renovation are in very shabby clothes, but have astonishing details associated with them.

Some details:

Worker - with some knowledge of plaster, cement etc - upto 600 rs / day

Helper - with elementary knowledge - generally present for material handling & lend an helping hand - upto 250-300 rs /day

Plumber - knowledge of pipes, flows, joints etc.. - upto 2000 / day (different sites)

Carpenter - Knowledge of doors (wood, aluminium etc..) - upto 1000 / day (different sites)

And above all, one project manager, who overlooks all of the above & coordinates with house owner makes nothing less than 1000 / day / site.

Its important here to understand the funda of "sites". Generally plumber, carpenter & the project manager work on multiple sites on a single day.

This is a very big industry in itself. There are many gray areas in these works & hence opportunity to make lot of money. There are various methods & ways to take the customer for a ride in these sort of works.

One thing i learned in due course, the business is an excellent example of theory that, businessmen need to understand the customers more than the technicalities associated with business. If one understands the customer, than the technicalities can follow. Hats off to the so-called "Kadia" industry in India.

New Religion - Liberals

A new religion has come aboard on the plethora of religions which co-exist in India. Yes.. its called "Liberals". Interested to know more...

The new millennium from its outset has created an air of change, an air of improvement, an air of challenging the age-old practices.

A couple in Mumbai, at the birth of their baby.. decided not to label the baby with any religion. This is much simpler said than done. The couple had to go through a host of hurdles.. hospital authorities, BMC officials.. to name a few.

Irrespective of the hurdles, the couple managed to get a birth certificate for their baby without any religion tag on the same. This has to be considered the birth of the new religion i.e "Liberals". The logic behind having a no pre-decided religion tag is fairly simple & understandable. Its a choice of the new-born to evaluate all the religions & choose the one which suits him/her.

India - country where every citizen has enshrined right in the constitution to follow any religion of his/her choice. Its quite absurd to label a child with any religion before he is even able to understand the theory of differentiation on basis of religion. The couple who fought the authorities had to convince the them a great deal. As always human behavior is to oppose change. But change is the only thing which has meaning in a equilibrium state.

The couple has decided to expose the child to host of religions, their values, demands & rituals. Its all then left in the hands of the child to decide which religion he/she wants to follow.

I suppose this step will give inspiration to host of other couples to go through this route. Education itself says - eliminate the boundaries of religion, caste & creed. This initiative for change in the traditional way of thinking & execution for bringing up a child will surely help in eliminating the traditional divide on basis of religion.