Before anyone gets all excited, this starbuck is not related to the gorgeous, spirited and sexy pilot of Battlestar Galactica… a huge fan though.
So, Gregory David Roberts’s pretentious tome, “Shantaram” is being made into a movie, with no less than Johnny Depp and Amitabh Bachchan starring in it. Don’t know if anyone else got the same feeling, but methinks it was created with the hope that it will one day grace the silver screens across the world. It has all the Masala of a Hollywood film complete with prison torture, odd "Madame" characters, War and a dying hero in this same war. Best part is, it will also appeal to the bollywood crowd, as it seems to have bollywood masala cleverly woven into the plot! Ah globalization !
If anyone out there is asking for my opinion, I think Leonardo Di Caprio would have made a far better Shantaram. No substitute for Amitabh Bachchan for the role of Khader Bhai. I hope they pick Rajpal Yadav for the part of Prabhaker.
Thursday, February 28, 2008
Sunday, February 3, 2008
Charity and Governance
Now that the markets are a bit more stable, I have been able to think of other things. This time it is about Charity.
Charity is a big thing in this part of the world and also while in Ireland, I noticed that the Irish are really big on charity. These days, I have noticed a lot of advertisements asking for charity. Some say you can sponsor a child in Africa or some where in the third world. There are visuals of malnourished kids and emaciated families.
There are tax breaks and various incentives to provide to accredited charities. To facilitate charities, it is now possible to authorize deduction of charities at the payroll itself. This allows mobilizing vast sums towards charities. To mobilize these charities and channel them to the target audience requires overheads of organization. Organizing and deploying charity is an industry in itself and has huge corporate sponsorship and charitable giving is likely to be part of performance appraisals in the near future.
The average Canadian is quite happy to donate to charitable causes the year round. The fact that quality of life is good in the first world allows people to be open to donating and also sensitive when shown human suffering.
What is prominent is the fact that there are campaigns to provide education and basic living facilities to disadvantaged children in the third world. This is really a good achievement. However, I always wonder if there are any charities that are aimed at addressing the root cause of these misfortunes. There is a common link between orphans, poverty and refugee issues and that is poor governance. The difference between regions of prosperity and regions of intense misfortune is governance.
Regardless of whether a country is resource rich (like Nigeria) or totally barren (Ethiopia) or has been prosperous in the past (Zimbabwe), the common thread is poor governance. The responsibility of the government is to be the custodian of the collective futures of its citizens and to manage the resources with a good vision and effective clean administration. Where this element is absent, what happens is that the proceeds of national resources do not reach the people. Corruption becomes rife and when public protests increase; there is a violent clampdown. It is established that those in government can benefit from the national resources, then elections become violent and common people get caught in the cross fire. Democracy becomes a casualty.
The result of all of this is the swelling number of orphans, poverty, and hopelessness. People who can flee such regimes end up as unwanted refugees. They risk their life and limb and end up in the shores of Spain or elsewhere in containers.
I am going to spend some time on the net doing research to find out if any NGO is involved in addressing these root causes and will share my findings. Meanwhile I can only think that if we are in a boat that has a hole in the hull, bailing buckets of water will help only to a certain extent. What will really solve the problem is sealing the hole. Similarly charity addressed at providing education and food to orphans and the needy in the third world is like bailing buckets of water from the boat. The water will continue to fill up until the hole in the hull is plugged.
Charity is a big thing in this part of the world and also while in Ireland, I noticed that the Irish are really big on charity. These days, I have noticed a lot of advertisements asking for charity. Some say you can sponsor a child in Africa or some where in the third world. There are visuals of malnourished kids and emaciated families.
There are tax breaks and various incentives to provide to accredited charities. To facilitate charities, it is now possible to authorize deduction of charities at the payroll itself. This allows mobilizing vast sums towards charities. To mobilize these charities and channel them to the target audience requires overheads of organization. Organizing and deploying charity is an industry in itself and has huge corporate sponsorship and charitable giving is likely to be part of performance appraisals in the near future.
The average Canadian is quite happy to donate to charitable causes the year round. The fact that quality of life is good in the first world allows people to be open to donating and also sensitive when shown human suffering.
What is prominent is the fact that there are campaigns to provide education and basic living facilities to disadvantaged children in the third world. This is really a good achievement. However, I always wonder if there are any charities that are aimed at addressing the root cause of these misfortunes. There is a common link between orphans, poverty and refugee issues and that is poor governance. The difference between regions of prosperity and regions of intense misfortune is governance.
Regardless of whether a country is resource rich (like Nigeria) or totally barren (Ethiopia) or has been prosperous in the past (Zimbabwe), the common thread is poor governance. The responsibility of the government is to be the custodian of the collective futures of its citizens and to manage the resources with a good vision and effective clean administration. Where this element is absent, what happens is that the proceeds of national resources do not reach the people. Corruption becomes rife and when public protests increase; there is a violent clampdown. It is established that those in government can benefit from the national resources, then elections become violent and common people get caught in the cross fire. Democracy becomes a casualty.
The result of all of this is the swelling number of orphans, poverty, and hopelessness. People who can flee such regimes end up as unwanted refugees. They risk their life and limb and end up in the shores of Spain or elsewhere in containers.
I am going to spend some time on the net doing research to find out if any NGO is involved in addressing these root causes and will share my findings. Meanwhile I can only think that if we are in a boat that has a hole in the hull, bailing buckets of water will help only to a certain extent. What will really solve the problem is sealing the hole. Similarly charity addressed at providing education and food to orphans and the needy in the third world is like bailing buckets of water from the boat. The water will continue to fill up until the hole in the hull is plugged.
Thursday, January 24, 2008
Things looking much better
Things are looking much better in both BSE/NSE and TSX. Plan to sell everything and hold deposits instead and wait out the volatility. other option is to buy high dividend Blue Chips and wait out the volatility. Waiting for the next interest rate cut to be announced before taking next steps. Let us see how it unfolds!
Wednesday, January 23, 2008
Relief
Things are looking better this morning. Gains overnight in BSE/NSE have improved the situation. Yet to see what the market holds today in TSX.
Tuesday, January 22, 2008
As I watch my shares fall in both BSE/NSE and TSX. I feel that I cannot do anything. I simply do not understand what is happening.
My calculation that Gold would be stable and hold value seems to be wrong given the reports that in India, investors are selling Gold to buy blue chips at rock bottom prices. This is in a way mixed news because it would mean that there is optimism in the market and I hope tomorrow sees the BSE/NSE pick up.
Meanwhile, I have been able to pick up some good scrips yesterday in BSE and TSX at really good prices. On hind sight I could have waited it out a day or so more especially since the U.S market was closed.
I am going to try my best not to look any more into my portfolio until this volatile period is behind us, but at the same time feel that i would later regret not having done some bottom fishing!!
My calculation that Gold would be stable and hold value seems to be wrong given the reports that in India, investors are selling Gold to buy blue chips at rock bottom prices. This is in a way mixed news because it would mean that there is optimism in the market and I hope tomorrow sees the BSE/NSE pick up.
Meanwhile, I have been able to pick up some good scrips yesterday in BSE and TSX at really good prices. On hind sight I could have waited it out a day or so more especially since the U.S market was closed.
I am going to try my best not to look any more into my portfolio until this volatile period is behind us, but at the same time feel that i would later regret not having done some bottom fishing!!
Monday, January 21, 2008
Markets in the Red!
BSE index fell below 18K mark to touch 17.5K. World wide there have been reports of heavy losses in the respective stock exchanges across Europe and Asia taking a cue from Wall Street following the announcement of the 145K "stimulus" package by Bush. Out here in Toronto, we have witnessed steady decline everyday for the past four to five days. Drops averaging, I guess, around 175 points per day.
It is interesting to see how things unfolded in Dalal Street. We had the largest IPO from Reliance Power that got oversubscribed many times over in the first hour itself. There was a simultaneous drop in the indices and that was explained as investors divesting their other holdings to get into the Reliance Power IPO. The word on the street is that the earliest project of Reliance Power would take atleast a year to manifest. So we see heavy optimism on one end over some future positive outcome and lots of really good companies losing their market cap very rapidly at the same time.
I have seen my portfolio lose around 18% value, but I am hanging in there. I believe that everything is relative. Everyone is in the same boat. It would be unwise to realise the loss by selling out the positions, instead one has to wait out the spell of negativity. One report says that the Asian markets (excluding Japan) have almost 47% of their trade confined to Asia as against 39% earlier. This implies that the influence of USA is that much less on the Asian Markets. If there is a little strength in Europe and Japan, then Asia should be able to weather the storm.
However, apart from the current woes in USA, it is believed that in the next couple of month another batch of sub-prime mortgage borrowers will enter a phase where their interest rates will go up by 2 to 3%. That is likely to bring about a reasonable amount of delinquency and the second wave of ABCP related issues. Probably those corporates that have estimated and decleared their ABCP losses might revise upward, their estimates. This is not likely to install confidence in the investors.
I also think that in the modern environment where communication technology has collapsed the world into a small global village, the power of media should not be underestimated. We sometimes talk ourselves into really bad economic scenario. The 24 hour news channels repeat the same negative economic news until something new and equally bad comes along. This does not help any one!
Let us wait and watch how things unfold.
It is interesting to see how things unfolded in Dalal Street. We had the largest IPO from Reliance Power that got oversubscribed many times over in the first hour itself. There was a simultaneous drop in the indices and that was explained as investors divesting their other holdings to get into the Reliance Power IPO. The word on the street is that the earliest project of Reliance Power would take atleast a year to manifest. So we see heavy optimism on one end over some future positive outcome and lots of really good companies losing their market cap very rapidly at the same time.
I have seen my portfolio lose around 18% value, but I am hanging in there. I believe that everything is relative. Everyone is in the same boat. It would be unwise to realise the loss by selling out the positions, instead one has to wait out the spell of negativity. One report says that the Asian markets (excluding Japan) have almost 47% of their trade confined to Asia as against 39% earlier. This implies that the influence of USA is that much less on the Asian Markets. If there is a little strength in Europe and Japan, then Asia should be able to weather the storm.
However, apart from the current woes in USA, it is believed that in the next couple of month another batch of sub-prime mortgage borrowers will enter a phase where their interest rates will go up by 2 to 3%. That is likely to bring about a reasonable amount of delinquency and the second wave of ABCP related issues. Probably those corporates that have estimated and decleared their ABCP losses might revise upward, their estimates. This is not likely to install confidence in the investors.
I also think that in the modern environment where communication technology has collapsed the world into a small global village, the power of media should not be underestimated. We sometimes talk ourselves into really bad economic scenario. The 24 hour news channels repeat the same negative economic news until something new and equally bad comes along. This does not help any one!
Let us wait and watch how things unfold.
Friday, January 18, 2008
Gold Bug!
The price of Gold has dropped once again after touching all time highs of above $900 an ounce only last week. I am quite confident that Gold should go up again and test the $1000 an ounce levels.
As an avid goldbug, I believe that Gold is the only commodity that can provide stability in the times of economic uncertainity. The reasons for this are many. Firstly in an economy, money should be printed only based on productivity delivered. However, such a fine distinction is difficult to make when countries run into deficit. This is what leads to dilution of value of the currency (inflation). In order to combat dilution of value, the common remedy is to increase the interest rate to reduce money supply. When this is done, the rate of depreciation of the currency increases unless the money taken out of circulation generates productivity equal to the interest rate or more.
Having said that, I think that since Gold has a finite supply, it would not be possible to just create more gold to bridge the deficit. Thus Gold can maintain its value. Secondly due to environmental concerns as well as depleting resources, Gold production is not meeting demands. This means that going forward, as the demand for Gold increases, the supply would not be adequate and therefore, the value of Gold will increase.
On the other hand, whatever Gold production takes place now, has a higher cost of production due to increased fuel costs and environmental compliance costs. This in itself will ensure that the price of Gold continues to increase.
If the Gold standard was used to define value of currency, it would be more robust. In other words, the total value of currency issues should be equal to the Gold held in reserve to back it. In the absence of this arrangement, it is very difficult to determine the intrinsic value of a currency except the fact that it is backed by a soverign promise to deliver value.
Over the last 5 years, the tendency of Gold price to rise has been tempered by steady flow of Gold auctions from the Central Banks of Europe. It was only last year that the Kuwaiti central bank bought Gold to diversify its reserves. If you think about it, China, Japan and India have a large foreign exchange reserve predominantly drawn in US Dollars. With the constant drop in the Value of the USD, these countries would like to diversify their reserves to preserve the value. The alternatives are the British Pound, Euro and Gold. The British Pound by itself would find it difficult to act as a reserve while the Euro is a political union with diverse economic scenarios in member states. Thus we find that some countries are moving into Gold while others are creating soverign wealth funds to buy assets at bargain prices.
The biggest boost for Gold will come when China decides to add Gold to its resources. There are unconfirmed reports that this has already commenced. The Gold futures market that just started up in China is another interesting indicator of the interest generated by Gold.
Another aspect to bear in mind is that as long as petrol prices are quoted in USD, the brunt of the economic problems will be borne by the Euro, CAD and British Pound while the USD continues to sink.
As an avid goldbug, I believe that Gold is the only commodity that can provide stability in the times of economic uncertainity. The reasons for this are many. Firstly in an economy, money should be printed only based on productivity delivered. However, such a fine distinction is difficult to make when countries run into deficit. This is what leads to dilution of value of the currency (inflation). In order to combat dilution of value, the common remedy is to increase the interest rate to reduce money supply. When this is done, the rate of depreciation of the currency increases unless the money taken out of circulation generates productivity equal to the interest rate or more.
Having said that, I think that since Gold has a finite supply, it would not be possible to just create more gold to bridge the deficit. Thus Gold can maintain its value. Secondly due to environmental concerns as well as depleting resources, Gold production is not meeting demands. This means that going forward, as the demand for Gold increases, the supply would not be adequate and therefore, the value of Gold will increase.
On the other hand, whatever Gold production takes place now, has a higher cost of production due to increased fuel costs and environmental compliance costs. This in itself will ensure that the price of Gold continues to increase.
If the Gold standard was used to define value of currency, it would be more robust. In other words, the total value of currency issues should be equal to the Gold held in reserve to back it. In the absence of this arrangement, it is very difficult to determine the intrinsic value of a currency except the fact that it is backed by a soverign promise to deliver value.
Over the last 5 years, the tendency of Gold price to rise has been tempered by steady flow of Gold auctions from the Central Banks of Europe. It was only last year that the Kuwaiti central bank bought Gold to diversify its reserves. If you think about it, China, Japan and India have a large foreign exchange reserve predominantly drawn in US Dollars. With the constant drop in the Value of the USD, these countries would like to diversify their reserves to preserve the value. The alternatives are the British Pound, Euro and Gold. The British Pound by itself would find it difficult to act as a reserve while the Euro is a political union with diverse economic scenarios in member states. Thus we find that some countries are moving into Gold while others are creating soverign wealth funds to buy assets at bargain prices.
The biggest boost for Gold will come when China decides to add Gold to its resources. There are unconfirmed reports that this has already commenced. The Gold futures market that just started up in China is another interesting indicator of the interest generated by Gold.
Another aspect to bear in mind is that as long as petrol prices are quoted in USD, the brunt of the economic problems will be borne by the Euro, CAD and British Pound while the USD continues to sink.
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