The recession and the parallels with the great depression.

The great depression started in 1929, Starting point being the “Black Tuesday” (19th October). The Dow Jones industrial average(DJIA) fell continuously for three years from 386 in 1929 to 40 which was the lowest point in the millennium. It reached the level the DJIA was in 1896, the year it was established. It took 25 years to get back to the 1929 levels.If we look at the great depression and the current recession we can see a lot of parallels.

The causes
Over leveraged financial position

1. 1929 the margin requirement was 10%.
2. When the stock market crash set in it led to cascading defaults at all levels leading to bank failures. 744 banks failed in the first 10 months of 1930.
3. Banks reduced lending and built up cash reserves fuelling the downward spiral.
4. Unsustainable credit driven boom.

Protectionism, Retaliation and the downward spiral.

1. Smoot-Hawley Tariff Act which raised the tariffs of 20000 imported goods and the trading partners retaliated by imposing their own higher tariffs. US exports dropped from 5.2 Billion in 1929 to 1.7 Billion in 1933

Contraction in money supply.

1. Bank failures led to drastic drop in credit availability
2. Consumers stayed away from credit
3. Excessive saving as part of the downward spiral

The current crisis too has developed in the same lines. It started with the credit driven boom and the over leveraged financial position. The financial system crashed first and the survivors are going to be over careful on what they with their loan and investment portfolio. We can see the glimpses of protectionism, Obama’s stimulus package is talking about protecting American jobs which could result in retaliatory measures from other countries. It has already resulted in significant decline in international trade.

The Solution:Demand side economics.

How can we boost demand.

By ensuring that there is money in the hands of people who are likely to spend. These are the people in the lower income groups who cannot afford to save as they have to spend money on their day to day affairs.

How can this be done: examples below

1. Instead of bailing out banks bail out the borrowers. Give money to the borrowers to close the mortgage.
2. Instead of bailing out GM give money to the people to buy cars. Give it free, subsidize etc.
   

The money in the hands of people who has a propensity to consume even in recessionary economy can boost demand therefore production therefore economic recovery.

....To be continued

Pinochet escapes lower courts for a higher one

Have a great Time in Hell Mr. Pinochet.

You are the epitome of state sponsored terror.You set an example for abusing power and getting away with it. You destroyed the lives of many a country men. You specialized in systematic abuse of human rights.

Words fail to describe you or your actions. Lucifer himself would be proud of what you achieved. You have killed at least 3,000 people and tortured 30,000.

The absence of justice is what pains as the most. You escaped trial for the numerous crimes against humanity. The pleas of justice from thousands of your victims and their relatives went unheard.

A mild dementia prevented you from standing trial? How frivolous can the justice system get? You might not remember your atrocities but the rest of the world will,how can they forget? Imagine Jack the ripper claiming exemption from trial saying he might not remember the first name of one of his victims.

Don't even talk about the economic progress Chile made under you. 40% of your population were under poverty when you were finally thrown out in 1990. It does not imply that any amount of economic progress can justify the rule of terror.


For a philosopher your life is the ultimate proof for the existence of god. Life becomes meaningless if some one like you can escape justice for eternity. It is the belief in the presence of higher court of justice that cure. Hope you have a great time in hell with your partners, Hitler, Idi Amin and the rest of them.

Bloody apathetic planet

Are we too preoccupied with ourselves? Are we not concerned about what is happening around us, at least in our neighboring galaxies? (I don't know what is happening in the next cubicle).


When I look up at the sky at night I'm amazed at the possibilities. Everything we can imagine should be happening some where in the universe however improbable it may be. Even an event with infinitesimal probability will have a probability of one if you sum it up over space time. It is 13.7 billion years since space and time disentangled. Space is big. You just won't believe how vastly, hugely, mind- bogglingly big it is. I mean, you may think it's a long way down the road to the Pub, but that's just peanuts to space (Credits to Douglas Adams). When you sum up the puny probability over the mind-bogglingly infinite space you will get 1.

There could even be places were Microsoft Works is not considered an oxymoron.

Still we are apathetic. Do we think we are alone in this universe? Are there intelligent life forms in this universe? Answer kind of depends on what actually is an intelligent life form. If it is anything like the two legged, caffeine saturated life forms from planet earth, there will be billions. I will prove the existence of other intelligent life forms in this universe. Here goes.

Question: Will the intelligent life form try to contact the human race under any circumstance.
Answer: Doh

Hence the theorem.

The apparent reason for this is the fact that our TV and radio signals are hurtling through the space looking for new victims. If some unsuspecting alien happens to watch a Jim Carrey movie he will make sure that he remains at least a Zillion light years away from earth.

........................................................To Be continued

What are you paid to do Mr. Chappell

Gregory Stephen Chappell was born 8/7/1948. 58 years later he came to India and ruined Indian cricket. His coaching stint in India can be considered as a fine case study in ruining a successful team by arrogance, stupidity, inability to motivate a team and overall incompetence. He is being paid close to 2000K for coming up with stupid metaphors and finding irrelevant parallels from Business.

This guy doesn’t understand what a process is and how process is built and how they are improved. A process is evolved for achieving steadier results by analyzing achieved results. It is way of locking in achieved results; it brings consistency. Evolving a process starts from achieving results, then you figure out how you achieved it. Once you know how you achieved a result you have a process. On the other hand Chappell believes that blindly following a process evolved in a different environment will achieve results (When donkeys fly). Chappell is even trying to build Australian pitches in India. Going forward we can import Australian players, MP’s and beer (could not leave this out)

In chapels case informed decision-making comes from a long tradition of guessing and then blaming others for inadequate result (Scot Adams quote).(this is an irrelevant business parallel, I’m following in Chappell’s footsteps)

Chappell’s achievements so far,

1. Ruined Indian team
2. Got paid a lot
3. Lot more perks
4. Came up with few stupid analogies
5. Taught politicians what they are paid for
6. Still in the process of understanding what he is paid for
7. No one has shot him so far

The other achievements are not that important in the cosmic scale of things.

Go ahead Chappell you still have time to do more damage.