Tuesday, December 30, 2008

why stimulus fails to stimulate

I am publishing this great excerpt from MJ's (a good and wise friend) email, that I think is worth sharing...

"Too many policymakers, business leaders and other experts are looking for ways to stimulate growth once again. The problem is they want to get back things to the way they were. Almost all efforts at stimulation would prove counter-productive...they will make the problems worse. Key idea to remember is that we had too much growth compared to our preparedness to assimilate growth. And growth at any cost is the strategy of the cancer cell not of a healthy one. First, tumors and other malignant stuff has to be removed. Only then tonics and exercise can deliver results. "

Friday, December 26, 2008

rubik's cube - a layman's howto

I have, recently, picked up solving the Rubik's cube. The key reason I wanted to do that is that it brings you closer to the intuitively understanding 3 things -

1. Algorithms
2. 3D visualization and memory
3. Permutations

I figured out the first layer based on my hit and trial. This is relatively easy for 2 reasons -

1. You don't have to worry about disturbing any pieces that are already in their place.
2. The algorithms involved, because of point 1, are simple and easy to derive visually.

What you need after that is a higher level algorithm around which pieces need to get solved in what order. While there are many options out there you need to pick one that is relatively easy. In addition you need to standardize on some kind of notation for representing different faces of the cube and rotation directions.

I picked up one of the many higher level algorithm based on minimal research. I was impatient to get to solve the cube first and worry about optimizations later. The algorithm i picked is a layer by layer solution which further breaks into sub-steps. Then comes the mechanical step of memorizing and applying specific algorithms to achieve each of these sub-steps.

Ideally, I'd have loved to solve the cube all the way by deriving my own algorithms but I am not sure I am bright enough or patient enough to do that. It was too hard for me to get an intuitive feel of the cube without any guidance. I decided that the I will use an existing algorithm to understand the cube and its positions better and then create variants at each level to further optimize my efforts.

It is amazing how practicing existing algorithms give you a good intuitive feel of the behaviour of the cube, enabling you to derive other algorithms. I am now at 3 minute level for solving the cube and I think i will need 2 kinds of changes to get really better. I need a different higher-level algorithm and I need to improve my speed of execution. Right now my hand positions are not at all optimized and cube movements are very labored.

The great thing about the cube is that it fills in a lot of idle time that we have and don't put to great use like the wait at the doctor's office, sitting in a car while your wife is driving, waiting in the parking lot while your wife is shopping etc etc etc. I am very happy to be engaged in active mental calisthenics during this free time.

Thursday, December 25, 2008

capitalism - gone wrong!

I have been finding ways to justify extraordinary amount of money being made by the folks at Wall Street and in the financial sector, in general. I know, for a fact, that financial industry has some of the smartest (analytically) people that I have come across. So, while the equation of smart people making more money in general has been directionally correct, what has troubled me is that the relative value created by the financial industry has not been commensurate with these vertigo inducing paychecks.

I am now convinced that our system has created an incentive structure that is directing our smartest away from the most pressing problems of our time. For a while, I was trying to justify it through the rationale that creation of investable surplus requires financial wizardry which in turn funds research and innovation in the real economy. The concept of leverage, aggregation, NPV and numerous others to create a financial structure that fosters innovation and continues to be, IMHO, a critical requirement for sustained investment into future technologies. But I think the value of these innovations pales in comparison to the challenges facing us in the real world with energy and range of other real world challenges. We need our best and the brightest to focus on solving these challenges and not working on creating fancy financial instruments which, as we now know, create a lot of destruction when they do not work as expected.

No human created system is a silver bullet solution including free markets or socialism. It needs to be clear that in the end these are approximate models of human behaviour in a wide range of circumstances that have more unknowns than knowns. Ideologues do a great dis-service to mankind and are singularly suited to media soundbytes due to the inherent simplicity of their position. World is complex with complex problems and our positions need to be nuanced and subtle while actions need to be decisive.

We, in the US, are so attuned to creating camps around free-marketers and neo-socialists that we fail to even present a nuanced argument that may not lie in either camp. Too often do I see masses and mass media giving preferential treatment to simplicity rather than accuracy.

I have been studying the current economic situation along with a wide range of geo-political issues and I have come to a conclusion, like many others, that we are in uncharted territory. We keep hearing the Great Depression etc, but while the effects may or may not be greater than Depression era, the underlying problems are deeper than what we saw during the Great Depression.

Our current financial tools are not going to solve the problem at hand and may just defer the situation. The solution lies in addressing the real world issues arising out of scarcity of resources and unsustainable growth models and the whole virtual wealth that is predicated on these unlimited and faulty growth assumptions. It is time for us to take a bitter pill and recognize the laws nature and once again tame the forces to serve human life.

Our best and the brightest need to be looking at these fundamental issues and all of the rest have a role to play too. Most importantly, we need to brace ourselves for bigger sacrifices, from hereon.

Friday, December 12, 2008

Blagojevich scandal -Indians at the center of the controversy

Chicago Tribune is reporting here about the potential involvement of 2 Indian-American businessmen in the "pay to play" scandal around President-elect Obama's senate seat. I am expecting late night show jokes on outsourcing corruption tonight.

Wednesday, December 10, 2008

GEICO vs Metlife car insurance

Yesterday, I was reading this message from Warren Buffet. Here he has strongly endorsed buying car insurance from GEICO, one of Berkshire's subsidiary. He claims that close to 40% of consumers will save money by going with GEICO. Given Mr. Buffet's credibility, I decided to try out GEICO. I was pleasantly surprised.

I have been a Metlife Auto Insurance customer for 7 years now. I went with them, largely, because they were the only big name willing to sell insurance to fresh immigrants like me, at a rate that seemed reasonable at that time. This was due to their existing relationship with my employer, Lucent Technologies. Since then shopping for car insurance deals has been the last thing on my mind.

But given the current economic situation, Mr. Buffet's personal recommendation and the fact that my auto insurance is up for renewal, I called up GEICO to get a quote.
The operator was more than friendly, he took all my information on the phone and gave me a quote (in 5 minutes) that was less than half of what I was paying Metlife and the coverage and deductibles were much better with GEICO. Needless to say, I changed my provider in a New York minute. It really amazes me that there is such a vast difference in insurance premiums across these providers.

Either GEICO is taking risks that are too high or Metlife's auto business will be dead before long. For now though GEICO rules. The skeptic in me wants to look deeper at GEICO and see if there is a catch.

Thursday, December 4, 2008

The Taj, The Oberoi - what about good ol' VT

Is it me or others also feel that there has been disproportionate amount of coverage of the Taj and the Oberoi than the death and destruction in CST railway station. It is no co-incidence, IMHO. "Not all lives or deaths are equal" - this is so deeply ingrained in our pysche that, we are only moved by death and suffering of people that we can relate to. We often blame the Western media about only talking about western casualties. There is great truth in these observations. But what we are blind to is the fact that it happens everywhere, at each level.

I do not remember Indian media talking about death and destruction in Africa. I dont remember Indian media covering numerous other attacks on Indian soil with as much rage and passion, as this one. The reason is that the media comprises of people who are urban and cosmopolitan. These are guys closer to Harvard than to Dharwad. These are guys who feel closer to guys dining in the Taj than they guys serving in Udipi. Guys just like me.

In general, though,Indian media is doing a great job of covering the length and breadth of the country/globe to provide a balanced view of the world. But we have a long way to go. It is naive to think that death of a homeless guy on the streets of Rewa will become equal to the death of film star in the tinseltown, any time soon. But it is a goal worth pursuing. It is the death of a unit of human aspiration and potential.

Monday, December 1, 2008

does India need a different form of government

I am increasingly getting convinced that India needs a Presidential form of democracy like the US. The executive arm needs two critical things to operate with strength, speed and conviction -

1. Ability to act without the need to worry about losing its job during its tenure.
2. Ability to draw upon the experience and expertise from a wider pool of talent from different walks of life to serve as Ministers rather than thoroughly incompetent populists that we elect into our legislatures.

The parliament should still serve in its legislative role and provide the counter balancing force to unbridled executive power. When I see world leading economists , four star generals, corporate executives in the Executive branch in the US and compare them to the Ministers in India who have hardly any qualifications and executive experience to manage such complex issues, i am convinced that we need meritocracy in the Executive branch and not populist democracy. Again, there may be exceptions in India where some ministers have had both the democratic mandate and the qualifications to execute with success but these are just that - exceptions.

I am not sure if the case for this has been made in the past ( I believe Arun Shourie has been a strong proponent of this thought). I am not an expert in Politics and Consitutional Law but it seems to me that amongst whole host of changes required in India, a massive change in the political system is required.

It has become fashionable to blame George Bush for all his failings post 9/11. But in all the noise, we forget that the US has not seen another attack, of any significant magnitude, since 9/11. To me this is an indicator of the effectiveness of Presidential form of democracy with clear mandate for leveraging wide range of expertise and the executive powers to make big decisions. The fact that the President is elected every 4 years prevents the President to become a monarch. The Congress and the Senate work to provide counterbalancing force during the term of the President. I think it is time to rework on India's underlying political power structure to reflect its needs. The current structure is designed to position populists into position of power and executive responsibilities, which only results in incompetence and corruption.

I'd like to hear from more and more people on their viewpoints in this forum.

Sunday, November 30, 2008

are there any sleepers left behind?

The biggest fear that I have is that, we seem to have so little clue on how and what exactly happened before the terrorists started the massacre. How do we know there were just a handful of them that came in boats ? Is it possible that there were possibly scores or even hundreds of trained terrorists that came on boats, a bulk of them vanished into their local hideouts, and only a handful carried out this first attack. What if a majority of them actually are waiting in their hideouts to carry out similar attacks in Mumbai and other parts, as part of a series of attacks.

Apart from the confessions from one captured terrorist, what are the forensic or investigative tools that are being used by our investigative agencies to confirm these fears.

It is really ironical that India with so much technology talent hasn't been able to harness its talent to provide the security apparatus with the necessary means of carrying out this kind of investigation. A theme worth investigating is getting a list of capabilities that more sophisticated intelligence agencies have in the world and compare them with those in India. Terrorism is now recognized as a global problem and no country that is at the receiving end of it should balk at cooperation from each other. A transnational problem requires a transnational counter.

Tuesday, November 18, 2008

"Because." says Ishaan.

Of late, Ishaan (my almost 4 year old) has started to respond to my questions in a very peculiar way. If I ask him a question of the "why did you do this or why do you say that" his response is often just a single word - Because.

It took me a while to realize that my wait for a completion of the sentence was in vain. In his mind "because" has morphed into an expression that captures all reasons that are still lacking words. Or it probably is synonymous with "just like that" but with a tad more seriousness and surety.

I am curious to find how other four year olds respond to questions that they have no obvious answer to.

Tuesday, October 14, 2008

Friday, October 10, 2008

new meaning of economical!!

This quote from Richard Feynman has great relevance in the context of the financial mess we are in -

"There are 10^11 stars in the galaxy. That used to be a huge number. But it's only a hundred billion. It's less than the national deficit! We used to call them astronomical numbers. Now we should call them economical numbers."

Wednesday, October 8, 2008

Thursday, October 2, 2008

image from the 10 yr reunion at IIM

It was great to meet paddy, ramas, soares, imemyself, chakru, and all the guys on the wrong side :-)

Wednesday, October 1, 2008

degrees of past tense

It is great to see Ishaan grow and add to his linguistic abilities. A sample of some of his adorable language quirks -->

Friday, September 26, 2008

It's a Plane. No It's a Bird. No, It's .

FUSIONMAN.  Today Yves Rossy completed a historic feat by becoming the first man to fly across the English Channel. Fly like a bird with wings !!
Here is a youtube video of one of his flights !! Here is his web page. http://www.jet-man.com/

Saturday, September 20, 2008

Is the recession good for environment

I started to collect anecdotal evidence to see if consumption patterns were being significantly effected due to the significant economic downturn. My neighbourhood grocery story tells me that his sales have been down 40% or so from just a few months ago. His other friends running small shops (sports goods shop in this case) have seen dramatic drop in sales. It just seems customers are instinctively tightening their belts, reducing consumption to absolute necessities. 

The stinginess is going upstream with retailers ordering smaller quantities from the wholesalers and wholesalers from the producers. At a consumer level, we definitely are looking to reduce wastage especially with food and perishables. Some of this is resulting in getting back to good old ways of watching your grocery consumptions carefully, which seems to have become extinct here for a long time.  So a good part of the reduction in consumption is surely cutting into wastage which i would wish to believe is a good thing.  It seems to me from this perspective recession may be good for the environment.

Tuesday, September 16, 2008

Our company web site

Our Company website is up and running. The url is http://www.mamigo.us
It continues to be a great journey for us !!

Monday, September 15, 2008

humour in day's events

This is what MJ ( a friend and an independent investment guru from the school of value investing) sent me to cheer me up on a gloomy Monday. Not sure if he was cheering me up or preparing me for some more bad news - readers decide !

"You give money to to Laymen brothers and stern bears? No wonder Wall street has problems. Any More gone, Stanley? Nah! Merely Lynched.."etc.


Friday, September 12, 2008

Another one bites the dust!

Freddie Mercury is probably raring to come out of his grave and sing that song on Wall Street this year.  Its Lehman this weekend, looking for a government bail out.  

The interesting thing though is that Lehman, like other financial companies, has adopted a strange accounting rule, FAS 159, which lets companies show decrease in the market value of their debt due to a decrease in their creditworthiness as an income gain in their P&L. This is truly fascinating and non-common sensical. See this link for some details  http://www.bloomberg.com/apps/news?pid=20601109&sid=a2ppBYA0ELaU&refer=exclusive

Why is this relevant ? It is relevant because if you take into account the the "fictitious income" arising out of this accounting jugglery the income statements  start to look really bad. For instance for the quarter ending Feb 08 the net income for Lehman will go into red sans this income. For income statements see here  http://finance.google.com/finance?fstype=ii&q=NYSE:LEH 

One interesting quote I remember from my accounting and coporate finance class is that you can never get a complete picture from just one of the financial statements - in this case the income statement. You have to look very closely at the balance sheet as well. The quality of assets and liabilities is critically important to the future earning potential of any Company. Earnings statement is just an indicator of past performance. Some of these get highlighted in these turbulent times. 

High time we look at balance sheets of the all the companies more carefully and do not get swayed by dog and pony show of quarterly earnings.

Thursday, September 11, 2008

humor in licensing terms !

I noticed this buried in the Chrome browser licensing terms -

"You should also get your employer (if you work as a programmer) or your school, if any, to sign a "copyright disclaimer" for the library, if necessary. Here is a sample; alter the names:

Yoyodyne, Inc., hereby disclaims all copyright interest in the library `Frob' (a library for tweaking knobs) written by James Random Hacker.

, 1 April 1990

Ty Coon, President of Vice "

The person(s) who wrote it has a fine sense of humor !!

Wednesday, September 10, 2008

Perils of a networked world!!

This story from Slashdot sounds right out of a B grade sci-fi movie, with bots and crawlers wreaking havoc, where a highly interconnected system has gone awry due to a minor glitch. 

WSJ reports (http://online.wsj.com/article_print/SB122100794359017593.html ) that Google News crawled a 2002 article when United Airlines was on the brink of bankruptcy.  Google News ran the story as today's news, automatically. The story was then picked up by other news aggregators and eventually headlined as a news flash on Bloomberg. This triggered automated trading programs to dump UAL, and the stocked tanked from $12 to $3 wiping out $1.14 billion  from the market cap. The stock recovered within the day to $10 and is now trading at $9.62, a market cap of $300M less than before Google ran the story. 

Is anyone liable here ?  Tribune for omitting the correct dateline, Google for not writing software that erred on the  side of caution in the case of a missing date, Bloomberg and other syndicators for not vetting their sources, or traders who haven't put "circuit breakers" in place for preventing such a mishap.   Clearly automated trading programs will see some specific requirements imposed, by reguatory bodies, for having some "manual" mechanisms in place for such freak events. 

The investors are reeling under the shock, including retail investors. For a flavor of what the retail investors are talking check out


Copyrighting Music!

In the Copyright law, I noticed that one cannot prepare derivative works based upon copyrighted work. Now in any art form, like music, that seems like an enormously difficult thing to enforce in an objective fashion. All music is derived from basic constructs like notes, chords, octaves, harmonics etc. Indian music is largely derived from Indian Classical Music which is essentially a large repository of well defined "ragas" which in turn are derived from a finite set of "thaats" and "melakartas". There exist higher level abstractions that are shared across different musical compositions. In a nutshell, simplest of music compositions have so many dimensions that one can, in theory, find commonalities across two seemingly disparate music compositions. In fact, deriving and augmenting is the way music evolves. Against this backdrop, laws written with such broad strokes reek of ignorance on part of lawmakers. They dont understand and dont care enough to try and understand the art and science of music. 
There is a big difference in protecting the  actual composition and specific digital recording of its rendition from distribution without compensating the creator and preventing or hindering other artistes from getting inspired by existing music creations. We have seen the fallout of allowing plagiarism through derivative works and I must say it pales in comparison to the loss to the evolution and spread of music that we will see if this particular clause in the law is enforced.


Tuesday, September 9, 2008

My Company - mAmigo

Manoj and I had co-founded mAmigo a year ago. Our company focusses on developing embedded video analytics products. For those of you who are interested in seeing what we do at mAmigo check out our blog at http://blog.mamigo.us


Olympics - a good business for NBC?

NBC had bought exclusive video rights  for the Beijing games for a  whopping $900M. The monetization avenues were, largely, through TV advertising but there were also some attempts to generate revenue through online video distribution and banner ads on its web sites. For an event that lasted for 16 days that is lot of revenue to be generated to break-even.  But NBC did make $1B in revenues from the exclusive distribution of the Olympics through TV. Its online revenues were though were underwhelming - video advertising revenue amounted to around $6 M and banner advertising amounted to around $12M more. 

The question to be asked is if $100 + M revenue (gross minus paying for the rights) is a good enough return. There would have been a siginificant cost of distraction from regular  programming that NBC would have faced in preparation and winding down from the Olympic fever. There must have been an expectation that benefits from Olympic viewership will outlast the event itself.  

I also tried to watch Olympics on the internet and I must say that the coverage was below par and not engaging enough.  The only reason I went there was to actually see Indian boxers who were doing well in the olympics but were not, for obvious reasons, covered on the TV here in the US. Clearly, the quality of coverage on the internet is deliberately kept way below par to ensure that television is not cannibalized.  I think the the event sponsors should sell internet rights to a separate entity that has no traditional media interests to maximize on the potential of internet viewership.  

Thursday, September 4, 2008

why diagonal slash?

I was just today asked this question on why title this blog "diagonal slash". What does it mean ? Diagonal Slash is a very specific line of argument used originally by Cantor to prove that the number of real numbers are more than the number of integers (both being infinite !!). Since then the technique has been used to prove a wide range of theorems like Godel's Incompleteness Theorem.

To me Diagonal Slash is an example of human insights that seem impossible to achieve using any alogrithmic or computational procedure. Diagonal Slash is the epitome of human insight and creativity. It is this kind of insight that I hope to achieve and share. It is a lofty goal, but one worth pursuing, if you ask me.

Wednesday, September 3, 2008

Internet advertising has arrived!!

Internet advertising in the US has crossed 21 B dollar mark in 2007. More importantly it has now surpassed broadcast network advertising, cable network advertising and radio advertising. Only news paper advertising and direct mail are ahead of Internet Advertising, admittedly by quite a bit. Both newspaper and direct mail are above the $50 B mark. It won’t be long when these last bastions of traditional media advertising will also fall.

Why do I say that? Let’s look at where Internet advertising was relative to other traditional forms of media in 2005. It was at $12 B - below broadcast TV, Radio, Cable TV and Consumer magazines. Now all these have fallen to fast growing (> 25% CAGR) internet advertising phenomenon. I believe it is still early days for internet advertising.It is going to grow by both eating into the share of traditional advertising as well as by growing the advertising pie.

In terms of forms of internet advertising, search based advertising has provided the biggest fillip to Internet advertising by capturing the imagination of advertisers. Search is clearly seen as the gateway to internet and hence is proving to be the most valuable real estate on the internet.
Right now there are tons of new media innovations that haven't realized their potential - video, gaming, social networking sites and downloadable and portable media, to name a few. These provide new and innovative ways for advertisers to engage consumers and get their message across.

The question that I have is what will be the nature of growth from here on for internet advertising. Will it be organic, albeit, rapid evolution of a range of innovations or will it be yet another “home run” internet phenomenon. For now IP video is not living up to its advertising revenue promise as evidenced by the challenges faced by Google in terms of being able to monetize YouTube traffic. Exciting times !!

Thursday, August 21, 2008

obama or mccain ?

We elect Presidents for a 4 year term not coronate monarchs for life in democracies. It is time that Americans take a dispassionate, not indifferent, approach to elections. The masses, that includes most of us, are whipped into a state of frenzy by inherently biased media, making us believe that these are defining times in our history and who we elect as President will effect the generations ahead of us and put is in an irreversible path to doom or prosperity. When was the last time you heard a presidential nominee or media say that this time is insignificant or less significant than any other. Sure there are problems and opportunities today as there were yesterday and day before that.

When i say our media is biased, I don't mean that it is biased in any specific direction but it is biased to ensure that they generate viewership by creating drama.We love drama and the media knows it. While that is great in many ways (who can feel bad about drama as an art form), it starts to get tricky when drama is mixed with news. It creates a heady concoction, the effects of which are unpredictable.

I was actually shaken out of this stupor by a wise professor of mine (Deb Chats as we fondly call him) who gently rebuked me when i told him that these are consequential times unlike any other time in my life. He probed me on why i thought that way and gradually i started to realize the emptiness of that statement. It was a statement of assertion which did not emanate out of experience or careful thought but just was a creation of churn induced by too much media exposure .

I have started to call these thoughts "bubbles" The analogy is appropriate as bubbles are on the surface, thin, fragile, by-product of churn in the water and are full of air!

If we are calm and composed now - Obama or McCain ?