Hi Friends,
A 'Man Booker Prize' for 2008 - richly deserved. Hard-hitting but true. It shreds almost all reality in India to pieces. You can't escape his " aka - Munna, Balram Halwai, Country-Mouse, Ashok Sharma etc." analysis or version. It is just true. What would be interesting is, if Mr. Adiga comes out in the same 'form' for other aspects of the world like injustice for the common man in the West, World Politics, World of Sports and the list goes on. The fact is, this can become a 'genre' in itself. A writing style. But for this to succeed the author needs to be fully aware of the local issues/slang/pulse etc.,
A thoroughly engrossing book. My colleague & friend 'Amin Merchant' would relate to this book very closely.
A snapshot (of what to expect):
I should explain a thing or two about caste. Even Indians get confused about this word, especially educated Indians in the cities. They'll make a mess of explaining it to you. But it's simple, really.
Let's start with me.
See - Balram Halwai, Halwai, my name, means 'sweet-maker'.
That's my caste - my destiny. Everyone in the Darkness who hears that name knows all about me at once. That's why me and my brother Kishan kept getting jobs at sweetshops wherever we went. The owner thought, Ah, they're Halwais, making sweets and tea is in their blood.
But if we were Halwais, then why was my father not making sweets but pulling a rickshaw? Why did I grow up breaking coals and wiping tables, instead of eating gulab jamuns and sweet pastries when and where I chose to? Why was I lean and dark and cunning, and not fat and creamy-skinned and smiling, like a boy raised on sweets would be?
See, this country, in its days of greatness, when it was the richest nation on earth, was like a zoo. A clean, well-kept, orderly zoo. Everyone in his place, everyone happy. Goldsmiths here. Cowherds here. Landlords there. The man called a Halwai made sweets. The man called a cowherd tended cows. The untouchable cleaned faeces.Landlords were kind to their serfs. Women covered their heads with a veil and turned their eyes to the ground when talking to strange men.
And then, thanks to all those politicians in Delhi, on the fifteenth of August, 1947 - the day the British left - the cages has been let open; and the animals had attacked and ripped each other apart and jungle law replaced zoo law. Those that were the most ferocious, the hungriest, had eaten everyone else up, and grown big bellies. That was all that counted now, the size of your belly. It didn't matter whether you were a woman, or a Muslim, or an untouchable: anyone with a belly could rise up. My father's father must have been a real Halwai, a sweet-maker, but when he inherited the shop, a member of some other caste must have stolen it from him with the help of the police. My father had not had the belly to fight back. That's why he had fallen all the way to the mud, to the level of a rickshaw-puller. That's why I was cheated of my destiny to be fat, and creamy-skinned, and smiling.
To sum up - in the old days there were one thousand castes and destinies in India. These days, there are just two castes: Men with Big Bellies, and Men with Small Bellies.
And only two destinies: eat - or get eaten up.
Cheers,
Pradeep Kabra
Friday 13 February 2009
Wednesday 11 February 2009
Re: A plan to separate buccaneers from the meticulous
Dear Sir,
This is a very good article on the cause & the actions of the present crisis explained in a very simple language.
But I would like to point out one step ahead of that. Why was the Glass & Steagall act repealed in US? Why were derivatives allowed to grow and trade without even basic trading desk? Why were hedge & private equity funds allowed to grow with no regulation?
The answer lies in one simple word - Bribery (for third world countries) = Lobbying (for Western world). Mr. Obama's first act as President was to rein in lobbyists. But again, it was not comprehensive enough. That is why, no matter what the govt. does now, in few years time all that will be forgotten and rules will be relaxed so that it can be business as usual. Infact, it took a good 50 years to repeal the Glass & Steagall act after it was created. The new Obama rules will take less than 10 to be repealed.
That is why Mr. Obama should act while he has public support and keeping the long-term prosperity in mind, he should set up comprehensive political reforms including COMPLETE BAN ON LOBBYING, GOVT. FUNDING FOR ELECTIONS ETC., Other countries can follow on similar lines.
Only then one can expect to have a society which rewards hard-work, creation & innovation and which punishes the speculators, looters and cheats. Only then one can expect to put the financial world in its rightful place of being the back-bone of an economy which helps in diverting finance efficiently to right people at the right time. Only then one can expect long-term equitable prosperity across the world.
This is where US under Mr. Obama has a chance to lead the world and show some leadership. Mr. Obama sold the concept of 'change' to get elected. Didn't he?
He had successfully talked-the-talk. Now he should demonstrate that he can walk-the-walk!!!
Regards,
Pradeep Kabra
A plan to separate buccaneers from the meticulous in Financial Times, 11-Feb-2009
John Kay / www.johnkay.com
The Obama administration’s plan to limit the remuneration of employees of publicly supported financial institutions to $500,000 has the simplicity of genius. A limit on pay is an effective way to reinstate the Glass-Steagall Act’s separation of commercial and investment banking.
The proposal sets the cap at about the right level. Retail banking is administered by people who earn less, mostly much less, than that. But no professional would join an investment bank unless he or she expected to earn far more. So the present dispute over pay and bonuses is more than a focus for populist anger about the cost of taxpayer bail-outs. Fundamental questions about the future structure of the financial services industry lie behind the controversy.
Some believe that conflicts of interest in financial conglomerates were at the heart of both the financial follies of the past decade: the new economy bubble of 1998-2000 and the credit expansion of 2003-2007. For such people it is essential to revisit the issues raised by Senators Glass and Steagall in the Great Depression.
Others claim that a basically sound structure of wholesale finance was upset by rogue mortgage brokers in America’s inner cities and the public’s love affair with housing and credit cards. Those who hold this view think it is important to keep top executives and traders in their posts. Only by doing so can failed banks be restored to their healthy state and weaned from dependence on the public purse.
The latter view was expressed last week by Deutsche Bank’s Josef
Ackermann, who explained that it was necessary to pay the going rate for talent even as his bank reported substantial losses. But German shareholders, taxpayers and depositors might take the alternative position. They might want such talent to be kept well away from their savings.
The growth of financial conglomerates in the past two decades followed different paths. In the US, the route was the successive relaxation and final repeal in 1999 of the Glass-Steagall Act. In Britain, restrictions on the activities of banking institutions disappeared as a result of market liberalisation and the regulatory “Big Bang” of 1986. Continental Europe always had universal banks, but only recently did they become aggressive in wholesale markets and securities trading in imitation of Anglo-American models. Globalisation of capital markets led to the convergence of institutional arrangements around the world.
But the good senators of 1933 were right. Diversified financial conglomerates are a bad idea. They are bad for their shareholders, victims of the organisational tensions that follow. The culmination of Sandy Weill’s aspirations at Citibank was a behemoth that neither he, nor anyone else, was capable of running. They are a bad idea for those who work in them. Tension between the buccaneering culture appropriate to trading and investment banking and the meticulous processing and caution needed for retail banking is perpetual.
Diversified financial conglomerates are a bad idea for customers because they are riddled with conflicts of interest. Most of all, they are a bad idea for taxpayers. Banks used the retail deposit base, with its effective government guarantee, as collateral for speculative trading. They created internal hedge funds, with fabulous leverage relative to their own capital.
The failure of these businesses has proved costly to shareholders and to innocent employees who have discovered that the apparently rock solid institutions they joined must eliminate their jobs to survive. Bank failure has proved costly to customers caught up in the collapse, and above all to the public purse. The growth of financial conglomerates served only the ambitions of the greedy men who ran them and the financial interests of traders, who were allowed to play with sums of money that should never have come into their hands.
These are the issues which President Barack Obama and Tim Geithner, the US Treasury secretary, seem willing to face – and which Gordon Brown and Alistair Darling in the UK, by setting up an inquiry, are desperate to kick into the long grass.
This is a very good article on the cause & the actions of the present crisis explained in a very simple language.
But I would like to point out one step ahead of that. Why was the Glass & Steagall act repealed in US? Why were derivatives allowed to grow and trade without even basic trading desk? Why were hedge & private equity funds allowed to grow with no regulation?
The answer lies in one simple word - Bribery (for third world countries) = Lobbying (for Western world). Mr. Obama's first act as President was to rein in lobbyists. But again, it was not comprehensive enough. That is why, no matter what the govt. does now, in few years time all that will be forgotten and rules will be relaxed so that it can be business as usual. Infact, it took a good 50 years to repeal the Glass & Steagall act after it was created. The new Obama rules will take less than 10 to be repealed.
That is why Mr. Obama should act while he has public support and keeping the long-term prosperity in mind, he should set up comprehensive political reforms including COMPLETE BAN ON LOBBYING, GOVT. FUNDING FOR ELECTIONS ETC., Other countries can follow on similar lines.
Only then one can expect to have a society which rewards hard-work, creation & innovation and which punishes the speculators, looters and cheats. Only then one can expect to put the financial world in its rightful place of being the back-bone of an economy which helps in diverting finance efficiently to right people at the right time. Only then one can expect long-term equitable prosperity across the world.
This is where US under Mr. Obama has a chance to lead the world and show some leadership. Mr. Obama sold the concept of 'change' to get elected. Didn't he?
He had successfully talked-the-talk. Now he should demonstrate that he can walk-the-walk!!!
Regards,
Pradeep Kabra
A plan to separate buccaneers from the meticulous in Financial Times, 11-Feb-2009
John Kay / www.johnkay.com
The Obama administration’s plan to limit the remuneration of employees of publicly supported financial institutions to $500,000 has the simplicity of genius. A limit on pay is an effective way to reinstate the Glass-Steagall Act’s separation of commercial and investment banking.
The proposal sets the cap at about the right level. Retail banking is administered by people who earn less, mostly much less, than that. But no professional would join an investment bank unless he or she expected to earn far more. So the present dispute over pay and bonuses is more than a focus for populist anger about the cost of taxpayer bail-outs. Fundamental questions about the future structure of the financial services industry lie behind the controversy.
Some believe that conflicts of interest in financial conglomerates were at the heart of both the financial follies of the past decade: the new economy bubble of 1998-2000 and the credit expansion of 2003-2007. For such people it is essential to revisit the issues raised by Senators Glass and Steagall in the Great Depression.
Others claim that a basically sound structure of wholesale finance was upset by rogue mortgage brokers in America’s inner cities and the public’s love affair with housing and credit cards. Those who hold this view think it is important to keep top executives and traders in their posts. Only by doing so can failed banks be restored to their healthy state and weaned from dependence on the public purse.
The latter view was expressed last week by Deutsche Bank’s Josef
Ackermann, who explained that it was necessary to pay the going rate for talent even as his bank reported substantial losses. But German shareholders, taxpayers and depositors might take the alternative position. They might want such talent to be kept well away from their savings.
The growth of financial conglomerates in the past two decades followed different paths. In the US, the route was the successive relaxation and final repeal in 1999 of the Glass-Steagall Act. In Britain, restrictions on the activities of banking institutions disappeared as a result of market liberalisation and the regulatory “Big Bang” of 1986. Continental Europe always had universal banks, but only recently did they become aggressive in wholesale markets and securities trading in imitation of Anglo-American models. Globalisation of capital markets led to the convergence of institutional arrangements around the world.
But the good senators of 1933 were right. Diversified financial conglomerates are a bad idea. They are bad for their shareholders, victims of the organisational tensions that follow. The culmination of Sandy Weill’s aspirations at Citibank was a behemoth that neither he, nor anyone else, was capable of running. They are a bad idea for those who work in them. Tension between the buccaneering culture appropriate to trading and investment banking and the meticulous processing and caution needed for retail banking is perpetual.
Diversified financial conglomerates are a bad idea for customers because they are riddled with conflicts of interest. Most of all, they are a bad idea for taxpayers. Banks used the retail deposit base, with its effective government guarantee, as collateral for speculative trading. They created internal hedge funds, with fabulous leverage relative to their own capital.
The failure of these businesses has proved costly to shareholders and to innocent employees who have discovered that the apparently rock solid institutions they joined must eliminate their jobs to survive. Bank failure has proved costly to customers caught up in the collapse, and above all to the public purse. The growth of financial conglomerates served only the ambitions of the greedy men who ran them and the financial interests of traders, who were allowed to play with sums of money that should never have come into their hands.
These are the issues which President Barack Obama and Tim Geithner, the US Treasury secretary, seem willing to face – and which Gordon Brown and Alistair Darling in the UK, by setting up an inquiry, are desperate to kick into the long grass.
Re: Another Trillion-Dollar Hole
This is a super eye-opener.
They say bank's are not lending - it is not rocket-science to see why they are not lending!!!
To think that actual leverage is not 1to25 but 1to50 for any average big bank is beyond Irresponsibility, Greed & Cheating. I'm sure even Darwin will struggle to find a 'term' to describe these goons in banking.
Any more hidden skeletons? Of-course how can they be hidden when subjective terms like 'goodwill' still exist?
Regards,
Pradeep
PS: Watch out for Barclays. Sheikhs or no-sheikhs, Gorden Brown or no-brown it wouldn't be a surprise if it goes down in an year's time.
Another Trillion-Dollar Hole by Daniel Gros in Wall Street Journal
Regulators seem to be torn between the need for transparent fair-value accounting and the perceived need to minimize the losses that banks report on their balance sheets. Some commentators thus proposed that we suspend mark-to-market rules for "toxic" assets, arguing that the current market for such securities simply does not exist or does not value them correctly.
However, there is another class of "assets" on the balance sheets that has so far been overlooked. During the boom years, many banks accumulated large amounts of intangible assets—such as a company's reputation, knowhow, employee morale or market position—that are supposed to generate future profits. When banks took over other institutions at inflated prices, they booked the difference between the price paid and book value as "goodwill."
Asset-price bubbles clearly lead to goodwill inflation as can be seen from the fact that in the U.S., according to the latest available data, goodwill and other intangibles quadrupled to more than $300 billion from $80 billion over the last five years. During the same time, the proportion of equity backed up by tangible assets only doubled, to close to 40% from 19%.
HOW MUCH GOODWILL IS LEFT?
LEVERAGE OF EUROPEAN BANKS WITH OR WITHOUT INTANGIBLE ASSETS AS OF JUNE 2008
TOTAL LEVERAGE
LEVERAGE EXCLUDING INTANGIBLES
UBS
46.9
61.5
HSBC HOLDINGS
20.1
26.7
BARCLAYS BANK
61.3
86.1
BBV ARGENTARIA
20.1
26.4
FORTIS
33.3
39.9
KBC
24.4
30.2
LLOYD'S TSB
34.1
41.7
RBS
18.8
27.8
CREDIT AGRICOLE
40.5
73.9
BNP PARIBAS
36.1
44.4
CREDIT SUISSE
33.4
42.8
Bank of America, for example, has more than $90 billion in goodwill and other intangible assets on its balance sheet, more than twice the company's market value of less than $40 billion. Many other banks are in a similar situation. The largest eight U.S. banks have a total of more than $300 billion in goodwill and other intangible assets on their balance sheets. In Europe the situation is not much different. According to the latest data available, the dozen largest European banks reported OE270 billion in intangible assets on their balance sheets. It's not surprising that the largest banks have proportionally the largest amounts of goodwill on their balance sheets since most of them grew via acquisitions during the boom years.
Now that the bust is with us, the question is whether all that "goodwill" still exists. Under today's market circumstances, the "fair value" of this hot air could be close to zero. The banking bailout thus could become much more expensive.
The U.S. banking system still has about $1 trillion in capital left, according to the latest estimates from the U.S. Federal Reserve, and could thus absorb at least part of the losses on its toxic assets. However, for the largest eight U.S. banks, intangibles amount to close to 50% of their equity. For the entire U.S. banking system this ratio is somewhat smaller, around 40%. In reality, then, the U.S. banking system has much less capital left to absorb losses on "toxic assets." After accounting for the fair value of its goodwill and other intangibles, it may need an additional $400 billion just to re-establish an adequate capital base. "Detoxification" would have to come on top of this.
Accountants might object that setting the value of goodwill to zero would be too radical. But "fair value" accounting principles imply that one should use market prices to value goodwill. With stock prices of most banks down between 80% to 90%, any "mark to market" of goodwill would suggest that a commensurate proportion of the goodwill is "impaired." Markets seem to have recognized this already as bank stocks are now trading below book value—but in many cases not far from "tangible book," i.e. the value of the banks' tangible assets. The realization that bank balance sheets are much weaker than they appear is certainly another reason why banks are hesitant to resume lending.
Globally, the total of goodwill and other intangible assets on banks' balance sheets is around $900 billion to $1 trillion. A realistic valuation of this " hot air" would thus probably lead to accounting losses of hundreds of billions, possibly up to $800 billion around the world.
Under present circumstances, neither regulators nor management have any interest in revealing the true extent of goodwill impairment. Write-downs of goodwill would not have a direct impact on regulatory capital ratios, but regulators would prefer not to have further huge accounting losses revealed in such unsettled market conditions. Auditors, though, would then have to decide whether they are willing to sign off on the banks' balance sheets. As markets have already started to price in the real value of goodwill, it might be better for banks to clean the slate in their 2008 yearend balance sheets and align the accounting with reality.
Another implication of assigning a "fair" value to goodwill on bank balance sheets is that the leverage ratios of particularly European banks are even higher than widely realized. The nearby chart shows the usual leverage ratio—total assets over total equity—and the "tangible" leverage ratio—tangible assets divided by tangible capital.
It is apparent that the "tangible" capital base of European banks is extremely thin. In many cases each euro of tangible capital supports more than OE50 of assets, a much higher ratio than in the U.S. The need to recapitalize European banks is thus even greater than regulators and the bankers themselves have admitted so far.
Mr. Gros is director of Center for European Policy Studies.
They say bank's are not lending - it is not rocket-science to see why they are not lending!!!
To think that actual leverage is not 1to25 but 1to50 for any average big bank is beyond Irresponsibility, Greed & Cheating. I'm sure even Darwin will struggle to find a 'term' to describe these goons in banking.
Any more hidden skeletons? Of-course how can they be hidden when subjective terms like 'goodwill' still exist?
Regards,
Pradeep
PS: Watch out for Barclays. Sheikhs or no-sheikhs, Gorden Brown or no-brown it wouldn't be a surprise if it goes down in an year's time.
Another Trillion-Dollar Hole by Daniel Gros in Wall Street Journal
Regulators seem to be torn between the need for transparent fair-value accounting and the perceived need to minimize the losses that banks report on their balance sheets. Some commentators thus proposed that we suspend mark-to-market rules for "toxic" assets, arguing that the current market for such securities simply does not exist or does not value them correctly.
However, there is another class of "assets" on the balance sheets that has so far been overlooked. During the boom years, many banks accumulated large amounts of intangible assets—such as a company's reputation, knowhow, employee morale or market position—that are supposed to generate future profits. When banks took over other institutions at inflated prices, they booked the difference between the price paid and book value as "goodwill."
Asset-price bubbles clearly lead to goodwill inflation as can be seen from the fact that in the U.S., according to the latest available data, goodwill and other intangibles quadrupled to more than $300 billion from $80 billion over the last five years. During the same time, the proportion of equity backed up by tangible assets only doubled, to close to 40% from 19%.
HOW MUCH GOODWILL IS LEFT?
LEVERAGE OF EUROPEAN BANKS WITH OR WITHOUT INTANGIBLE ASSETS AS OF JUNE 2008
TOTAL LEVERAGE
LEVERAGE EXCLUDING INTANGIBLES
UBS
46.9
61.5
HSBC HOLDINGS
20.1
26.7
BARCLAYS BANK
61.3
86.1
BBV ARGENTARIA
20.1
26.4
FORTIS
33.3
39.9
KBC
24.4
30.2
LLOYD'S TSB
34.1
41.7
RBS
18.8
27.8
CREDIT AGRICOLE
40.5
73.9
BNP PARIBAS
36.1
44.4
CREDIT SUISSE
33.4
42.8
Bank of America, for example, has more than $90 billion in goodwill and other intangible assets on its balance sheet, more than twice the company's market value of less than $40 billion. Many other banks are in a similar situation. The largest eight U.S. banks have a total of more than $300 billion in goodwill and other intangible assets on their balance sheets. In Europe the situation is not much different. According to the latest data available, the dozen largest European banks reported OE270 billion in intangible assets on their balance sheets. It's not surprising that the largest banks have proportionally the largest amounts of goodwill on their balance sheets since most of them grew via acquisitions during the boom years.
Now that the bust is with us, the question is whether all that "goodwill" still exists. Under today's market circumstances, the "fair value" of this hot air could be close to zero. The banking bailout thus could become much more expensive.
The U.S. banking system still has about $1 trillion in capital left, according to the latest estimates from the U.S. Federal Reserve, and could thus absorb at least part of the losses on its toxic assets. However, for the largest eight U.S. banks, intangibles amount to close to 50% of their equity. For the entire U.S. banking system this ratio is somewhat smaller, around 40%. In reality, then, the U.S. banking system has much less capital left to absorb losses on "toxic assets." After accounting for the fair value of its goodwill and other intangibles, it may need an additional $400 billion just to re-establish an adequate capital base. "Detoxification" would have to come on top of this.
Accountants might object that setting the value of goodwill to zero would be too radical. But "fair value" accounting principles imply that one should use market prices to value goodwill. With stock prices of most banks down between 80% to 90%, any "mark to market" of goodwill would suggest that a commensurate proportion of the goodwill is "impaired." Markets seem to have recognized this already as bank stocks are now trading below book value—but in many cases not far from "tangible book," i.e. the value of the banks' tangible assets. The realization that bank balance sheets are much weaker than they appear is certainly another reason why banks are hesitant to resume lending.
Globally, the total of goodwill and other intangible assets on banks' balance sheets is around $900 billion to $1 trillion. A realistic valuation of this " hot air" would thus probably lead to accounting losses of hundreds of billions, possibly up to $800 billion around the world.
Under present circumstances, neither regulators nor management have any interest in revealing the true extent of goodwill impairment. Write-downs of goodwill would not have a direct impact on regulatory capital ratios, but regulators would prefer not to have further huge accounting losses revealed in such unsettled market conditions. Auditors, though, would then have to decide whether they are willing to sign off on the banks' balance sheets. As markets have already started to price in the real value of goodwill, it might be better for banks to clean the slate in their 2008 yearend balance sheets and align the accounting with reality.
Another implication of assigning a "fair" value to goodwill on bank balance sheets is that the leverage ratios of particularly European banks are even higher than widely realized. The nearby chart shows the usual leverage ratio—total assets over total equity—and the "tangible" leverage ratio—tangible assets divided by tangible capital.
It is apparent that the "tangible" capital base of European banks is extremely thin. In many cases each euro of tangible capital supports more than OE50 of assets, a much higher ratio than in the U.S. The need to recapitalize European banks is thus even greater than regulators and the bankers themselves have admitted so far.
Mr. Gros is director of Center for European Policy Studies.
Tuesday 10 February 2009
What's wrong with Chelsea?
Some nice insights: by Simon Barnes in Times, 10-Feb-2009
So Chelsea fired Luiz Felipe Scolari. You may be good enough for Brazil, but if you think you're good enough for Chelsea, you've got another think coming. You come here with your fancy talk about winning the World Cup, but what about the Carling Cup, eh? How many times have you won that?
So let us pause for a moment. Chelsea sacked Scolari because they thought there's something wrong with him. But all the evidence points the other way. Scolari is a good manager. Could it be - could it actually be, perchance - that there is something wrong with Chelsea?
So what should you do when the manager of a big club can finish only eleventh in the league? Say you stick by him and a couple of seasons later you're eleventh again. And then things get even worse, a run of six defeats and two draws in eight games. That's it! We've been patient long enough! Had Manchester United done that, they'd have sacked Sir Alex Ferguson.
Think long term. Aim for stability. Devolve power to the manager. Back him. Stick with him through the rough patches. How extraordinary that five of the top six clubs in the Premier League follow this policy; how bizarre that it's the one that doesn't that's in crisis.
But it pays to look a bit beyond the weekly routine of elation and despair. That's the way of smart supporters, smart owners and smart managers. They look for bigger patterns, for enduring trends, for lasting value.
When a man presents you to his fifth wife, you don't wonder what was wrong with the previous four; you wonder what's wrong with the bloke. And when a football club get rid of four top managers in half a dozen seasons - well, you don't wonder what's wrong with the managers, do you?
---------------------------------------------------------------------------------------
Well the fact is the guy who made 'easy money' during the Russian liberalization will not understand the meaning of hard-work, team-building or work-ethic. He thinks everything is plastic. Pay the money & buy it!!!
But there are few things in life which one can't buy - time, team-building, love etc.,
Good luck Chelsea. Mourinho is going to be the next Manchester United Manager once Sir Alex retires!!! Lol! And then Manchester United will rule for another 20 years!!!
Pradeep Kabra
So Chelsea fired Luiz Felipe Scolari. You may be good enough for Brazil, but if you think you're good enough for Chelsea, you've got another think coming. You come here with your fancy talk about winning the World Cup, but what about the Carling Cup, eh? How many times have you won that?
So let us pause for a moment. Chelsea sacked Scolari because they thought there's something wrong with him. But all the evidence points the other way. Scolari is a good manager. Could it be - could it actually be, perchance - that there is something wrong with Chelsea?
So what should you do when the manager of a big club can finish only eleventh in the league? Say you stick by him and a couple of seasons later you're eleventh again. And then things get even worse, a run of six defeats and two draws in eight games. That's it! We've been patient long enough! Had Manchester United done that, they'd have sacked Sir Alex Ferguson.
Think long term. Aim for stability. Devolve power to the manager. Back him. Stick with him through the rough patches. How extraordinary that five of the top six clubs in the Premier League follow this policy; how bizarre that it's the one that doesn't that's in crisis.
But it pays to look a bit beyond the weekly routine of elation and despair. That's the way of smart supporters, smart owners and smart managers. They look for bigger patterns, for enduring trends, for lasting value.
When a man presents you to his fifth wife, you don't wonder what was wrong with the previous four; you wonder what's wrong with the bloke. And when a football club get rid of four top managers in half a dozen seasons - well, you don't wonder what's wrong with the managers, do you?
---------------------------------------------------------------------------------------
Well the fact is the guy who made 'easy money' during the Russian liberalization will not understand the meaning of hard-work, team-building or work-ethic. He thinks everything is plastic. Pay the money & buy it!!!
But there are few things in life which one can't buy - time, team-building, love etc.,
Good luck Chelsea. Mourinho is going to be the next Manchester United Manager once Sir Alex retires!!! Lol! And then Manchester United will rule for another 20 years!!!
Pradeep Kabra
Monday 9 February 2009
Re: Give the market a free hand in Digital Britain
To
The Editor
Financial Times
Dear Sir,
Thanks for publishing this article by Mr. Jeremy Darroch. He is very kind enough to preach about innovation and sharing when Sky's whole business model is based on paying exorbitant money to buy sporting rights and deny the population the joys of weekend sports unless they are preparing to shell out atleast £45/month. Furthermore, Sky doesn't even share its content with other service providers (like Virgin Media) even on a pay-basis.
On the innovation front, the real innovation has come from BBC - its landmark Iplayer is a case in point.
Anyway, no matter what Mr. Darroch preaches (parrotting Mr. James Murdoch) the fact is only those companies will survive who take care of their customers and who innovate on a regular basis. The 6 billion pounds loss in the last quarter have shown the craks in Sky's approach. Very soon they will consume it, unless rather than talking the talk, they start walking the walk.
With kind regards,
Pradeep Kabra
Give the market a free hand in Digital Britain
By Jeremy Darroch
Published: February 3 2009 19:36 | Last updated: February 3 2009 19:36
So much has changed since Sky launched 20 years ago this week. The days when movies were an occasional treat and news happened three times a day are a distant memory. The pace of change has only accelerated since the launch of digital television, the rise of personal video recorders and the growth of broadband.
The consumer’s experience has been transformed. That is to be celebrated. But one feature has not changed much at all. The interim report on Digital Britain by Lord Carter, communications minister, reminds us that the traditional distrust of the market’s role in the provision of high-quality content is as strong as ever. Digital Britain proposes to support the creation of digital content and offset the decline in advertising revenues through alternative funding mechanisms. The usual suspects are rounded up for consideration: industry or equipment levies; allowing content providers to bid for public money; and various regulatory levers.
The document could have contemplated a more radical option. With a fresh approach, policymakers could choose to prioritise a positive climate for commercial investment. Consumers could make an informed choice about products and services they wish to consume and pay for. The revenues could drive profitable returns and reinvestment in further high-quality content.
What is the evidence such a formula could work? Look no further than the marketplace today. Subscription has grown over the past 20 years from zero to become the biggest single source of industry revenue. There is a growing array of content that meets public service broadcasting purposes without public subsidy. Our own channels make an important contribution in news, sport, entertainment and, increasingly, the arts. Broadcasters such as Discovery, National Geographic and The History Channel are also responding to consumer demand with increased investment in UK programmes.
While television advertising revenues are in decline and there are growing demands on public finances, there is nothing to suggest subscription will not continue to grow. Yet Digital Britain fails to comprehend fully that consumers’ willingness to pay for things they value can offer a sustainable model for funding high-quality content. It is accepted for newspapers, books, theatre and, of course, internet access. Why should television be different?
As consumers embrace the freedom to choose, the old system of regulatory levers is in decline. They worked best when advertisers had little choice of where to spend and a captive audience tuned in because there was no alternative. The certainties that underpinned the privileges and obligations of the commercial public service channels – ITV1, Channel 4 and Five – have gone forever. However, it takes longer to change broadcasting culture. Within the industry, too much time is spent on how to secure regulatory or political advantage instead of how to satisfy customers or viewers. Regulators and policymakers do not seem able to shake off their interventionist ways.
Nothing could be further from Sky’s view. We believe open competition and accountability to customers are a powerful force for the good of consumers and society. Government and regulators should encourage commercial investment and innovation. This is the approach advocated by Digital Britain, rightly, for development of super-fast broadband networks. But content is treated differently. Faced with threats to the public service broadcasting institutions, the proposed remedy is to increase the scale of state intervention still further. Digital Britain speaks of “a new organisation of the scale and reach needed for the multi-media, multi-platform digital world”, while Ofcom, the telecommunications regulator, has referred to the possible nationalisation of Five within a larger state-controlled entity built out of Channel 4.
Never mind that there are already 17 channels on Freeview wholly or partly owned by the state. Or that the BBC receives £3.5bn of public money annually to provide a bedrock the market alone cannot deliver. Before being carried away by the rhetoric of big ideas, politicians and regulators should consider a more restrained framework. It would begin with more careful prioritisation at the BBC, which spends up to £100m of public money a year on Hollywood programming at a time when Ofcom has declared a crisis in UK regional news for the want of less than £50m a year.
And it would acknowledge the important role of private enterprise, safeguard the incentives for commercial investment and encourage the market to keep delivering for consumers.
The writer is chief executive, British Sky Broadcasting in Financial Times, 03-Feb-2009
The Editor
Financial Times
Dear Sir,
Thanks for publishing this article by Mr. Jeremy Darroch. He is very kind enough to preach about innovation and sharing when Sky's whole business model is based on paying exorbitant money to buy sporting rights and deny the population the joys of weekend sports unless they are preparing to shell out atleast £45/month. Furthermore, Sky doesn't even share its content with other service providers (like Virgin Media) even on a pay-basis.
On the innovation front, the real innovation has come from BBC - its landmark Iplayer is a case in point.
Anyway, no matter what Mr. Darroch preaches (parrotting Mr. James Murdoch) the fact is only those companies will survive who take care of their customers and who innovate on a regular basis. The 6 billion pounds loss in the last quarter have shown the craks in Sky's approach. Very soon they will consume it, unless rather than talking the talk, they start walking the walk.
With kind regards,
Pradeep Kabra
Give the market a free hand in Digital Britain
By Jeremy Darroch
Published: February 3 2009 19:36 | Last updated: February 3 2009 19:36
So much has changed since Sky launched 20 years ago this week. The days when movies were an occasional treat and news happened three times a day are a distant memory. The pace of change has only accelerated since the launch of digital television, the rise of personal video recorders and the growth of broadband.
The consumer’s experience has been transformed. That is to be celebrated. But one feature has not changed much at all. The interim report on Digital Britain by Lord Carter, communications minister, reminds us that the traditional distrust of the market’s role in the provision of high-quality content is as strong as ever. Digital Britain proposes to support the creation of digital content and offset the decline in advertising revenues through alternative funding mechanisms. The usual suspects are rounded up for consideration: industry or equipment levies; allowing content providers to bid for public money; and various regulatory levers.
The document could have contemplated a more radical option. With a fresh approach, policymakers could choose to prioritise a positive climate for commercial investment. Consumers could make an informed choice about products and services they wish to consume and pay for. The revenues could drive profitable returns and reinvestment in further high-quality content.
What is the evidence such a formula could work? Look no further than the marketplace today. Subscription has grown over the past 20 years from zero to become the biggest single source of industry revenue. There is a growing array of content that meets public service broadcasting purposes without public subsidy. Our own channels make an important contribution in news, sport, entertainment and, increasingly, the arts. Broadcasters such as Discovery, National Geographic and The History Channel are also responding to consumer demand with increased investment in UK programmes.
While television advertising revenues are in decline and there are growing demands on public finances, there is nothing to suggest subscription will not continue to grow. Yet Digital Britain fails to comprehend fully that consumers’ willingness to pay for things they value can offer a sustainable model for funding high-quality content. It is accepted for newspapers, books, theatre and, of course, internet access. Why should television be different?
As consumers embrace the freedom to choose, the old system of regulatory levers is in decline. They worked best when advertisers had little choice of where to spend and a captive audience tuned in because there was no alternative. The certainties that underpinned the privileges and obligations of the commercial public service channels – ITV1, Channel 4 and Five – have gone forever. However, it takes longer to change broadcasting culture. Within the industry, too much time is spent on how to secure regulatory or political advantage instead of how to satisfy customers or viewers. Regulators and policymakers do not seem able to shake off their interventionist ways.
Nothing could be further from Sky’s view. We believe open competition and accountability to customers are a powerful force for the good of consumers and society. Government and regulators should encourage commercial investment and innovation. This is the approach advocated by Digital Britain, rightly, for development of super-fast broadband networks. But content is treated differently. Faced with threats to the public service broadcasting institutions, the proposed remedy is to increase the scale of state intervention still further. Digital Britain speaks of “a new organisation of the scale and reach needed for the multi-media, multi-platform digital world”, while Ofcom, the telecommunications regulator, has referred to the possible nationalisation of Five within a larger state-controlled entity built out of Channel 4.
Never mind that there are already 17 channels on Freeview wholly or partly owned by the state. Or that the BBC receives £3.5bn of public money annually to provide a bedrock the market alone cannot deliver. Before being carried away by the rhetoric of big ideas, politicians and regulators should consider a more restrained framework. It would begin with more careful prioritisation at the BBC, which spends up to £100m of public money a year on Hollywood programming at a time when Ofcom has declared a crisis in UK regional news for the want of less than £50m a year.
And it would acknowledge the important role of private enterprise, safeguard the incentives for commercial investment and encourage the market to keep delivering for consumers.
The writer is chief executive, British Sky Broadcasting in Financial Times, 03-Feb-2009
Sunday 1 February 2009
Incredible Nadal - Human Dynamo!!!
This weeks 'you can win' is dedicated to 'human dynamo' Rafael Nadal. Just watch his finals against Roger Federer in Australian Open 2009 today and you will see what I mean.
After playing the longest ever match (5 Hours, 13 minutes) in Aus Open Semi-Finals against Verdasco on Friday, Nadal again played for more than 4 hours to defeat Federer in the Finals. This is just incredible human achievement.
If you watch the match statistics, you will see that Federer had more winners, less unforced errors, more aces, less double-faults & better overall percentage game & still Nadal wins. This is a classic example of 'willingness to win' under any circumstance.
Also remember that these two matches were of highest quality of tennis at the highest level and not just any other five-setters. They were comparable to the best matches ever played - Borg Vs Conners in Wimbledon, Federer Vs Nadal in last year's Wimbledon etc.,
Congratulations to Nadal & Thanks for the inspiration.
Regards,
Pradeep
PS: I'm hard-core fan of Roger Federer.
After playing the longest ever match (5 Hours, 13 minutes) in Aus Open Semi-Finals against Verdasco on Friday, Nadal again played for more than 4 hours to defeat Federer in the Finals. This is just incredible human achievement.
If you watch the match statistics, you will see that Federer had more winners, less unforced errors, more aces, less double-faults & better overall percentage game & still Nadal wins. This is a classic example of 'willingness to win' under any circumstance.
Also remember that these two matches were of highest quality of tennis at the highest level and not just any other five-setters. They were comparable to the best matches ever played - Borg Vs Conners in Wimbledon, Federer Vs Nadal in last year's Wimbledon etc.,
Congratulations to Nadal & Thanks for the inspiration.
Regards,
Pradeep
PS: I'm hard-core fan of Roger Federer.
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