10 Things You Need to Know About Losing Weight

Hi All,

I saw this wonderful program on BBC.
http://www.bbc.co.uk/iplayer/episode/b00ksh7c/10_Things_You_Need_to_Know_About_Losing_Weight/
(unfortunately available only to UK users)

The best part of it is - it clears lots of myths and demonstrates the effectiveness of these simple steps with scientific evidence. The facts about Visceral Fat, Importance of Proteins, Myth of Skipping Meals, Effective Power of Common Sense, Effect of Dairy Products etc., is amazing.

First some facts - Visceral Fat (hidden fat) leads to Type II Diabetes, Can create heart disease and cancer.
Ghrelin harmone asks brain to get food esp. high calorie food to compensate.
Out body burns fat by daily activities like breathing, heart-pumping, brain ticking over etc.,
An average person should have appx. 2,000 calories/day
Some food calorie facts - Black Coffee - 10, Cappucino - 110; Toast - 125, Pastry - 270; Grilled Chicken with Salad Lunch - 250, Same with Mozerella and creamy dressing - 450; 2 Apples - 120, Bar of Chocolate - 300; Pizza with thin crust - 850, Pizza with Deep Pan Pepporeni - 1400; Bloody Mary - 125, Pina Calodan - 280;
Examples of Proteins - Lean Meat, Eggs, Beans, Fish etc.,
Examples of Carbohydrates - Pasta, Bread, Potatoes etc.,
Examples of Fats - Fried Foods, Butter etc.,

10 Tips:

1. Don't Skip Meals - Because our brain has a really primitive response to this, making us crave high-calorie, high-fat foods to compensate, and will-power may not be enough to fight it.

2. Use Smaller Plates - You'll use less food on your plate and could end up eating up to 22% less food over-all just by changing the plate size form 12 inches to 10 inches.

3. Count Your Calories - If you know which calorie laden foods to avoid, you'll be able to eat well without putting on weight.

4. Don't Blame Your Metabolism - The fact is you have simply eaten more food than your body needs and it's stored the excess of fat

5. Protein Staves Off Hunger Pangs - Protein will keep your feeling fuller for longer because protein control hunger pangs by releasing PYY Harmone which sends signal to our brain that it is full

6. Soup Keeps You Feeling Fuller For Longer - Soup is one fo the best kept secrets of dieting

7. The Wider The Choice, The More You Eat - Variety triggers our instincts to try everything and that can lead to over eating.

8. Low Fat Dairy Products (like Skimmed Milk, Low Fat Yoghurt, Cheese, Cottage Cheese and Creme Fraiche) Helps You Excrete More Fat - That is because it absorbs the fat from your stomach and goes down the drain.

9. Exercise Goes On Burning Fat, Even When You Sleep - Not only do you burn fat while you exercise, but the astonishing thing is we keep on burning fat for around 24 hours longer even when we're asleep. That is because our body fuels are made of Carbohydrates and Fats in that order. When we exercise we use up the Carbohydrates. So for the rest of the day and night, our daily activities dip in to the reserves of fat to get going.

10. Keep Moving And Lose Weight - Small changes in our daily routine (like taking stairs, walking to super-market, walking from tube-station rather than somebody picking you up etc.,) can significantly increase the number of calories we burn. JUST KEEP ACTIVE.

Re: Barcelona's Iniesta shows why technique trumps tenacity

"Spain are now unbeaten in 31 games. They had an undefeated run of 25 games before falling to Makelele’s France at the World Cup of 2006. They have been the best national team on earth for five years now." - Simon Kuper

With this kind of under-stated record, I think they should play the world cup 2010 without Spain. The winner should play Spain directly in the finals to lose!!!

As a United fan it is heart-breaking but as a football fan it is a joy and honor to see these great players (Xavi, Iniesta and co.) in action. It's just magic!!!

Pradeep

Barcelona's Iniesta shows why technique trumps tenacity

By Simon Kuper

Published: May 30 2009 03:00 | Last updated: May 30 2009 03:00

It rarely happens, but sometimes a footballer stops to savour the moment. On Wednesday night Andres Iniesta was 25 years old, in Rome, at his peak, and part of a Barcelona team that was passing rings around Manchester United. This was as good as it gets. So for a second during yet another attack he just rolled the ball around under his foot, as if tickling its belly. In Rome, Iniesta showed his sport the way forward.

Iniesta, his teammate Xavi and Barcelona's coach Josep Guardiola possibly don't share much DNA, but in football terms they are brothers. The first brother, Guardiola, emerged 20 years ago as the definitive Barca playmaker: effectively the side's quarterback, who launched almost every attack with a perfect pass. The second brother, little Xavi, was better. Finally, almost a decade ago, a tiny white-faced teenager showed up at Barca's training. Guardiola studied Iniesta for a bit, turned to Xavi, and said: "You've seen that? You'll push me towards the exit, but that guy will send us both into retirement."

It took a while. In 2006, when Barcelona last won the Champions League, Iniesta appeared only as a substitute. But inside the club, everyone knew he was coming. Last year I asked Barcelona's then coach Frank Rijkaard to name the player with the perfect personality for top-class football. Rijkaard hummed and hawed, but finally, in triumph, shouted out the right answer: "Andres - Andres Iniesta! He's always there in training, always tries, and is just a wonderful footballer."

Iniesta's magical year began in Vienna last June. In the final of Euro 2008, his Spanish team passed rings around Germany. Vienna prefigured Rome. Both times, Iniesta, Xavi and their buddies seemed to be playing piggy-in-the-middle against Europe's second-best team. Germany and United chased ball in the heat. It wasn't fair.

Barcelona have to play like that. "Without the ball we are a horrible team," says Guardiola. "So we need the ball." Barca are too little - perhaps the shortest great team since the 1950s - to win the ball by tackling. The unofficial minimum height for top-class football is about 5'8", and Xavi, Iniesta and Lionel Messi are below it. The minimum for central defenders is about 6'0", and Carles Puyol is below that. So Barca defend either by closing off space through perfect positioning, or by keeping the ball. Johan Cruijff, Dutch father of the Barcelona style, teaches: "If we have the ball, they can't score."

Modern football is supposed to be manlier. Managers talk about "heart", "grit" and "bottle" and kilometres covered. What Iniesta showed in Rome is that these are secondary virtues. Football is a dance in space. When everyone is charging around closing the gaps, you need the technique of Iniesta to find tiny openings. In Rome, he barely mislaid a pass. Sometimes he'd float past United players, his yellow boots barely marking the grass. Occasionally he hit little lobs, a sign that he knew this was his night.

We know how good United are. That's the measure of how good Barca were in Rome. In games at this level, some very respected players get found out. It happened to United's Ji-Sung Park and Michael Carrick, but also to Wayne Rooney. Excellent with his right foot, he is helpless with his left. Barcelona covered his one foot.

When it was over, Barca's players celebrated with their fans behind the goal; but as we looked from players to fans and back again, it was impossible to say which was which. Iniesta is a Barca fan. On Wednesday he was one of seven starting players raised in Barcelona's academy, the Masía.

Had he popped into the VIP buffet elsewhere in the Stadio Olimpico, he'd have seen a portent. Eusebio, Portugal's star of the 1960s, was hanging around alone in a blazer. Every few seconds, someone would come up to hug him, or just express awe, and Eusebio would smile. He must do this 100 times a week. A year ago, you couldn't have imagined Iniesta in old age receiving such honours. You can now. In Rome Rooney called him "the best player in the world at the moment". Iniesta's next target: the world cup 2010.

simonkuper-ft@hotmail.com

Copyright The Financial Times Limited 2009

End of DREAM???

I know United lost but still it was a great spectacle and honor to watch Iniesta, Xavi, Messi and co. Complete football played with impeccable belief.

I know nobody, not even the hard-core fans of United, not even Sir Alex Ferguson grudge the honor and victory to Barcelona but still I would have been happy if United played the United way and the defence was successful on the night.

Nevertheless, I'm happy that Barcelona did not humiliated United. I'm truly happy with 2-0 rather than 6-1 or 6-2 which was a possibility on a night when Barcelona controlled the game, the ball and the result for 80/90 minutes.

End of DREAM???....so what! beginning of a new journey again!!!

Hail United!

Re: Indian democracy has an ugly side

Dear Mr. Rachman,

Thanks for the article in today's FT. Your facts are almost right but analysis is wrong on "It is certainly true that the political future of China looks more uncertain and alarming than that of India". It is not just that I dis-agree with that, it is plainly wrong.

The reason is political future of any country or community is dependent on the inherent strengths that includes a) infrastructure and resources b) rule of law c) institutions and democracy - in that order.

For instance, a country which does not have infrastructure and resources will have no political future at all. Why do you think 34% of internal India is under the control of Naxals?

For instance, a country which doesn't implement the rule of law if you don't have money, contacts or connections will have no political future at all. Why do you think 128 of the 543 MP's are criminals in the official sense. But the rest will not do anything, unless you pay or you have 'connections'

China is far ahead in infrastructure and rule of law than India. Would naxals or terrorist groups dare to challenge the govt. of China?

Can you kindly answer to this - a govt. (India's congress govt.) which cannot protect it's own people from naxals or terrorists and cannot maintain the basic rule of law, how can it give any political future to the country or have any political future at all?

Infact, forget the rule of law or protection from terrorists, in the next 5-10 years, if things don't improve on basic infrastructure, most of the population will struggle to get basic drinking water. What political future will that lead to?

The matter of fact is, the concept of democracy in ideal western sense works when some conditions are met viz., a) basic infrastructure b) rule of law c) educated population. In the absence of these, the only way forward is the Chinese way. That should be used as a model template across the poor world. And that is a fact whether one likes it or not.

Finally, a small bridge in any town or city of India will take atleast 5 years to build. In the same period, the Chinese will lay more than 800,000 kms of motorways.
Similarly, a single power plant (remember Enron in Maharashtra in 90's) takes atleast 10 years to build and operate. The Chinese add more than UK's capacity every year.

I hope you don't mis-understand my comments. But as you rightly say, Indian democracy has jot just an ugly side but it is running out of time to survive.

This is not a pessimistic view but it is a ugly fact which needs to be accepted and acted upon.

Regards,

Pradeep Kabra
Indian democracy has an ugly side

Published: May 18 2009 19:30 | Last updated: May 18 2009 19:30

Pinn llustration



“A billion people, in a functioning democracy. Ain’t that something.” George W. Bush’s awestruck musings on the wonders of Indian democracy will be echoed all around the world this week.

Despite a sharp economic slowdown and a series of destabilising terrorist attacks, India’s 420m voters have just calmly voted the Congress party back into government, with a much increased majority.

In western capitals, admiration for the maturity of Indian democracy will be mixed with relief. There were fears that a government led by the rightwing BJP would take a more confrontational line with Pakistan – widening the conflict in south Asia in new and dangerous ways. Investors also seem to be impressed. The stock market shot up 17 per cent in the wake of Congress’s victory.

Political scientists have spent years demonstrating that democracy rarely survives in poor countries. India is a triumphant exception to this rule. Despite the fact that a quarter of its population live below the poverty line, the country has been a functioning democracy for almost the entire period since independence in 1947.

Indian democracy is indeed a wonder to behold. But this fact can lead to some unwarranted starry-eyed conclusions about the country. At this moment of euphoria, four common notions about Indian democracy deserve to be doused with a little scepticism.

First, it should be remembered that the country’s democracy is not always a beautiful sight. Manmohan Singh, the 76-year-old prime minister who has just won re-election, is a charmingly intellectual and courtly figure. But while Mr Singh is an impeccable frontman, the country’s politics has a much sleazier and more disreputable side.

In most countries when politicians are slammed as “criminals” this is simply vulgar abuse. In India, it is often the literal truth. The British public, currently hyperventilating about expenses fiddles in the UK parliament, might be interested to know that 128 of the 543 members of the last Indian parliament had faced criminal charges or investigations, including 83 cases of murder. In a poor society, gangsters can and do use muscle and money to force their way into parliament.

Second, just because India is a democracy, it does not follow that it will automatically side with fellow-democracies around the world. Mr Bush’s interest in Indian democracy was more than purely intellectual. The former president made a conscious decision to form a strategic alliance with India – and to cut the country a special deal over nuclear weapons – because he felt that democracies should be natural allies.

The Americans are carefully building a new special relationship with democratic India, partly to counterbalance authoritarian China. It is certainly true that relations between the US and India have been getting steadily warmer, driven by commerce, Indian immigration to America, the English language and – to a degree – common values.

But India is a major power with its own interests and its own distinct take on the world. It will not automatically fall into line with western policy, whether on sanctions against Iran or a world trade deal. And if realpolitik dictates, India is perfectly capable of cosying up to a dictatorship, such as the Burmese military junta.

The sleazy side of Indian democracy has led to a third common notion – popular in the authoritarian parts of Asia: the idea that democracy imposes a sort of tax on India. For many years, it was held that India suffered from a “Hindu rate of growth” because of its inefficient government. Growth in recent years, which has increased to an average of 9 per cent, should have put paid to that idea. But it is still true that, for all the virtues of its political system, Indian governance has failed hundreds of millions of people. Rates of poverty and illiteracy are much higher in democratic India than in authoritarian China.

Euphoria about modern India has led to a fourth mistaken idea: the notion that democracy has given the country a deep and unshakable stability. It is certainly true that the political future of China looks more uncertain and alarming than that of India, Asia’s other great subcontinental nation. But India still faces serious threats to its internal stability. The Indian Premier League is a new cricket tournament that has demonstrated the country’s growing wealth and cultural power by drawing in the best players from all over the world. However, the threat of terrorism is now so severe that this month’s tournament had to be relocated to South Africa. The country’s parliament and most prestigious hotels have come under attack in recent years.

While terrorism can be blamed on outsiders, India is also facing a serious internal insurrection. The notion of Maoist guerrillas roaming the countryside sounds like it belongs to another age – and is certainly at odds with the image of a modern India of commuter airlines and high technology. But over the past five years the Naxal insurgency has grown in strength – attacks on trains, mines and industrial sites are on the rise.

It is indeed marvellous that a country that is so large and so relatively poor can manage a peaceful, democratic transition. The new Indian government should also be able to use its stronger majority to renew the process of economic reform. But there are still some unappealing realities just behind the beautiful facade of Indian democracy.

gideon.rachman@ft.com

Copyright The Financial Times Limited 2009

The Big 'iffffffffffffffffffffffffff'

I think what Mr. Colao is forgetting is a) he is late to the party b) he forgot to bring the wine c) now in haste he is entering the wrong party.

What it means is in the world of digg and widgets, why would somebody pay for content unless it is from WSJ or Economist or FT or some specialized info. And why would not these mentioned sources sell their content directly via a widget?

So, the 'if' you mentioned is actually 'ifffffffffffffffffffffffffffff'

Pradeep Kabra

Re: Face value - Call the carabiniere
May 14th 2009
From The Economist print edition


Vittorio Colao has an ambitious plan to boost Vodafone’s fortunes—and rescue the media industry

STRAIGHT is not always the best way up. Vittorio Colao, now the boss of Vodafone, is a prime example. In 2004 he left the world’s largest mobile operator by revenues to run a company in an entirely different business: RCS MediaGroup, an Italian media conglomerate. He returned to Vodafone only two years later after a row with RCS’s main shareholders, having gained some valuable insights. One is that telecoms and media firms are culturally very different—knocking on the head the idea that Vodafone ought to become a content provider. In addition the newspaper business showed him that rivals can share important infrastructure, such as distribution. “After all, they compete on their editorial quality,” says Mr Colao, “not in driving trucks around.”

That may help explain the thinking behind the ambitious project Vodafone announced on May 12th. It is a bold attempt to rally some of the industry’s biggest operators to build a joint global platform through which software companies and content providers can sell things to mobile subscribers. If it is a success— admittedly, a big if—it will help address two of the criticisms levelled at Vodafone: that it is too big for its own good, and that mobile operators are destined to end up as “dumb pipes”, mere utilities that transport data to and from handsets.

When Mr Colao was appointed as Vodafone’s boss a year ago, he was not expected to come up with grand plans. Vodafone was no longer the global collection of wireless baronies that Sir Christopher Gent, the firm’s swashbuckling boss, had put together in the 1990s through a series of daring acquisitions. But Sir Christopher’s more down-to-earth successor, Arun Sarin, did not quite manage to make the pieces fit together. Vodafone’s subsidiaries have yet to gain much from their parent’s huge size, says Robin Bienenstock, an analyst at Bernstein Research. Mr Colao seemed to be just the man to fix this. In the 1990s while working at McKinsey, a consultancy, this reserve officer in the Italian Carabinieri and graduate of Harvard Business School had helped set up Omnitel Pronto, an Italian mobile operator, and later became its boss. In 2000 it became part of Vodafone and is still one of its most profitable units, thanks in part to his early work.

Just cutting costs and improving efficiency, however, is not enough in today’s mobile-phone industry (though Vodafone’s annual results on May 19th are expected to show that Mr Colao is rather good at it). The market for its main product, mobile telephony, is rapidly maturing in many rich countries. This prompted Mr Sarin to take control of several operators in developing countries that still boast rapid growth. Beyond that, operators have set out in search of new frontiers. One is mobile-data services, a market that is finally taking off after years of hype.

The problem for Vodafone and other operators is that they are trying to catch up. They have long offered such services, but steered users towards “walled gardens” of pre-approved content from which they could take a cut. This stifled the market and left an opening for other firms to create mobile-data platforms of their own. Apple led the way with its elegant iPhone and its “App Store” that gives users easy access to thousands of applications, and lets software developers charge for them. This inspired similar app-store platforms from other technology giants, including Google, Nokia, Microsoft and RIM, the maker of the BlackBerry.

Yet it is this variety that will allow Vodafone back into the game, argues Mr Colao. To make his point he enthusiastically presents visitors to his office at the firm’s headquarters in Newbury, an hour’s drive west of London, with two charts. The first, titled “Today: Complexity”, shows many boxes linked by arrows. A software firm must write several versions of its applications for different platforms, for example, and the owner of a particular handset is usually restricted to a particular platform. Mr Colao’s other chart, titled “Tomorrow: One relationship”, is centred on a big, red box labelled “Vodafone Services”. This is an über-platform that would allow programmers to write an application which could then run on other platforms, and would also provide essential sub-services, such as determining a user’s location and, most importantly, charging for downloads. Mr Colao promises not to be “too greedy”: Vodafone intends to pass on 70% of revenues to developers, the same share as Apple does.

One platform to rule them all

The idea of enabling a single piece of software to run on lots of devices has been tried before, but has never really succeeded. Software firms may feel more at home working with partners in the computer industry: mobile operators are widely seen as lumbering giants, if not greedy predators. And consumers may prefer handset, platform and software to come in a tightly integrated package, as with the iPhone. Most importantly, rival platform-owners are unlikely to co-operate, and might even scupper the project by introducing deliberate incompatibilities.

Still, Vodafone has one thing in its favour: size. It has more than 290m subscribers worldwide, all of whom are potential customers for software firms and content providers. And Mr Colao’s scheme is also backed by China Mobile, the world’s largest operator by subscriber numbers; Softbank, a Japanese conglomerate; and America’s Verizon Wireless, in which Vodafone has a 45% stake. If they realise their plans to launch their own app stores based on the new platform, the potential market will be more than 1 billion subscribers and span the entire globe.

Success is by no means guaranteed, but Mr Colao is not known for giving up easily. Indeed, it was his single-mindedness that got him into trouble at RCS. And if his plan takes off, he says, it could help save media, which he says is still his “second love”. Vodafone’s scheme would give publishers a way to charge small sums, or micropayments, for content—and put right “the big mistake they have made on the internet: giving their content away for free.” Will the industry, and consumers, play along?

Re: Lift the veil on our war aims

Dear Gideon,

Thanks for the article in today's FT. I find some naivety in your article though:

1. As marked as bold - If Pakistani govt was in control of Swat valley, things wouldn't have come to this stage. The fact that bombers can bomb at will even in Lahore & Islamabad shows that Pakistan is no different from Afganisthan where the govt. rules only Kabul. So assuming that 'power of persuasion' of US & UK can change things is being naive.

2. Even after 7 years of fighting, the West is not clear about its basic goals in Afganisthan shows what happens when 'ideology' is imposed or when it is used as a smoke-screen. The fact is 'democracy' is non-sense in a tribal society like Afganisthan and the purpose of Americans attacking Afganisthan was to take revenge on Al-Qaeda & Bin Laden and not the welfare of Afgans or bringing the sun-shine democracy. Since they couldn't nab Bin Laden, they are still there. Had he been caught, by now Americans would have long exited.

Regards,

Pradeep Kabra

Re: Lift the veil on our war aims

Published in Financial Times: April 13 2009 19:58 | Last updated: April 13 2009 19:58

The Darul Aman palace is a huge neo-classical pile with hundreds of rooms, set against the backdrop of the snowy mountains that surround Kabul. From a distance, it is an imposing sight. Unfortunately, as I discovered when I visited a few weeks ago, it is also a ruin. The palace was all but destroyed in the Afghan civil war of the 1990s.

Darul Aman was built in the 1920s by Amanullah Khan, a reformist king who also promoted women’s rights and discouraged the wearing of the burqa. Ninety years later, the king is long dead, his palace is a wreck and the burqa is ubiquitous in Kabul.

I thought of King Amanullah’s reforms this week, as debate flared over a law recently passed by the Afghan parliament. The statute, which applies to the country’s Shia minority, would require women to get their husband’s permission to leave the home and make it illegal for them to refuse to have sex with their husbands.

News of the law was a severe embarrassment for the Nato alliance, just as it was announcing a new strategy to prop up the Afghan government and fight off the Taliban. One of Nato’s most popular arguments for the war has long been that the Taliban are medieval, women-hating savages. Western officials stress the number of girls who have been able to go back to school since the fall of the Taliban seven years ago. Laura Bush, the former first lady of the US, once argued that “the fight against terrorism is also a fight for the rights and dignity of women”.

The new Afghan law is now said to be “under review” by President Hamid Karzai – while the perils faced by women’s rights activists were underlined this weekend by the murder of Sitara Achakzai in Kandahar. Similar problems are surfacing in Pakistan, now that the government has conceded control of the Swat valley – just two hours from the capital, Islamabad – to Taliban-style militants.

Since then, a horrifying video has circulated of a young girl being flogged by bearded mullahs for some alleged act of immodesty. Last week Pakistan’s human-rights commission reported that the Swat militants have destroyed 131 girls’ schools since they took power earlier this year.

Both the Pakistan and the Afghan governments are key allies of the west in the conflict formerly known as the “war on terror”. But is it also our business to prevent Afghans and Pakistanis waging a “war on women”?

Western leaders seem confused. Jaap de Hoop Scheffer, the outgoing Nato secretary-general, condemned the new law and said of the Afghan war: “We are there to defend universal values.” President Barack Obama took a slightly different line. He called the new law “abhorrent”. But he also said that people should remember that American troops are in Afghanistan to fight for US national security and that “we have a clear and focused goal: to disrupt, dismantle and defeat al-Qaeda”.

So which is to be – universal values or national security? The easy way out of the argument is to say that there is no conflict between these aims. The Taliban and al-Qaeda oppress women and threaten the west. By defeating them, you advance western security and women’s rights.

In the case of Pakistan, this is probably true. The decision to concede the Swat valley to the Pakistani Taliban is a security disaster. It has given Islamist militants and foreign terrorists new resources and safe havens. This is dangerous for both Pakistan and the west.

So the sooner the Pakistani government can re-assert control over the area, the better. The US and the UK should use all their powers of persuasion – including financial and military aid – to persuade the Pakistanis to be less supine in Swat.

The case of Afghanistan is trickier. Nato is openly looking for an exit strategy for western troops. This could well involve dealing with those elements of the Taliban that are not committed to a global jihad – and so making some accommodation with their ferociously reactionary social values. Sadly, these do have roots in Afghan society. Things would be much easier if western views of women’s rights were indeed “universal values” – but they are not, at least not among Pashtun tribesmen. It is significant that Mr Karzai is thought initially to have approved of this new law as an electioneering gambit, ahead of the presidential poll in August.

After seven years of fighting, the US and European public now deserve some clarity about our war aims in Afghanistan. We are not fighting for women’s rights. We are fighting to prevent the country ever again becoming a base for attacks on the west.

This does not mean that the protection of women should be a matter of indifference for the US and for the European governments that have sent troops to Afghanistan. By invading the country, we took some responsibility for the government that is left behind. So while the west still funds and protects the Karzai administration, we should lean on the Afghan government not to accept outrageously misogynistic laws.

But we should also be realistic about what Nato can achieve. The very phrase “exit strategy” acknowledges that we are on our way out. Once western troops have left, it is the balance of forces within Afghan society that will decide whether girls’ schools remain open and women can walk the streets in freedom.

There are modernisers and brave individuals within Afghan society who will fight for women’s rights, long after Nato has left. But, as the fate of King Amanullah’s reforms suggests, there can be no guarantee that the modernisers will win.

Post and read comments on Gideon Rachman’s blog

gideon.rachman@ft.com

Copyright The Financial Times Limited 2009

Re: Candy brothers victims of property swindle

This is true but really funny. I thought only the 'bankers' are crooks!!! Even pensioners have joined them. They say, bankers did what they did because of too much innovation. These pensioners I think had too little of it. Probably they were bored.

Pradeep

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Candy brothers victims of property swindle

By Jim Pickardin Financial Times

Published: March 20 2009 21:55 | Last updated: March 20 2009 21:55

The Candy brothers, two of London’s best known property entrepreneurs, have emerged as the victims of an audacious swindle perpetrated by four pensioners who pretended to own a 47-acre Berkshire estate.

The quartet have just been jailed for the fraud, in which the Candys and their bankers, HBOS, bought King’s Beeches, a property once owned by the King of Thailand.

The real owner, billionaire Saudi sheikh Khalid Bin Mahfouz, was not aware of the fraudulent sale.

The Berkshire plot was bought in 2004, some time before Nick and Christian Candy rose to prominence as the pair behind some of the most high-end deals in London’s property boom, including the £1bn purchase of Chelsea Barracks last year.

They were gulled into buying the site for £6.5m on the basis of flawed paperwork that wrongly suggested that the fraudsters had been the real owners.

After the fraud was detected, the brothers won a separate civil case against the Land Registry, the guardian of Britain’s land rights, which had inadvertently allowed the Berkshire deal to go ahead.

As a result, the registry had to make its biggest ever compensation payment of £8m, including legal fees, which was shared between the brothers and HBOS.

The Land Registry said on Friday that it had been the victim of forged documents but it was its policy to compensate for any mistakes on its register.

Christian Candy told the FT on Friday night that there was likely to be a rise in the number of similar cases uncovered during the course of the recession.

King’s Beeches had been owned since 1991 by Glenside Holdings (Bermuda), a vehicle of Sheikh Kahlid Bin Mahfouz. In October 2004 the estate was sold, after several back-to-back sales, to a vehicle of Christian Candy.

Unknown to any of the buyers, the fraudsters completed a Land Registry transfer form, using forged signatures, to shift the property from Glenside Holdings to another – entirely innocent – company, Glenside Investments.

As the four men were sent to jail last week, Judge Nicholas Wood said it was a “great shame” to see elderly men committing such a crime.

Michael Downer, 71, was jailed for five years; John Clifford Williams, 65, for two and a half; John Mervyn Jones, 62, for six; and Malcolm Brown, 69, for four years and nine months.

Copyright The Financial Times Limited 2009

Re: Barack Obama's foreign policy

To
The Editor,
Economist

Sir,

You mention that "Iran may have armed the Taliban but is invited to a 'big tent' meeting on Afganistan".

I think this remark is baseless. Taliban is armed not by Shia Iran but by America's close Sunni allies in Arab World. Making remarks without any proof doesn't do any good to the reputation of an esteemed magazine like Economist.

Just because Iran doesn't approve of West, doesn't mean you can make sense-less accusations.

Regards,

Pradeep Kabra
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Barack Obama's foreign policy

All very engaging
Mar 12th 2009
From The Economist print edition


America’s president has made a good start in foreign policy. But the hard choices are still to come

FOR impeccable reasons, Barack Obama has concentrated since becoming president on fixing America’s economy. On foreign policy, he has only sketched the outline. Soon, however, he must start to fill in some details. Early next month he goes to Europe for the G20 summit on the world economy, NATO’s 60th birthday party in Strasbourg and a meeting with the European Union in Prague. He intends on the same trip to take in Turkey, thus fulfilling a promise to make an early visit to a Muslim country and start mending relations with the Islamic world. When he visited Europe as a candidate last summer, 200,000 Berliners cheered him to the skies. This time, he will be expected to put substance behind the magic.

So far, the outline at least is fine. Mr Obama has resisted the temptation to tear up every one of George Bush’s policies, but he has transformed the tone. The fight against al-Qaeda is to continue, but without the preaching that alienated America’s allies or the torture that betrayed its values. He is pulling out of Iraq, but on a cautious timetable. He is sending more troops to Afghanistan, but reviewing the strategy of a war he admits America is failing to win. He is extending his hand to adversaries, but without yet making America look like a soft touch.

This belief in “engaging” is so far the most visible element of the emerging Obama doctrine. Mr Obama, it seems, is not a man to push foes into a corner or stick rude labels on them, as Mr Bush did. Iran and Syria are no longer rogue regimes beyond polite society: the band formerly known as the “axis of evil” is being summoned to join the conversation. Iran may have armed the Taliban but is invited to a “big tent” meeting on Afghanistan. Syria may have ordered the assassination of a former prime minister of Lebanon, but Hillary Clinton, Mr Obama’s secretary of state, has sent her officials to patch up relations with Bashar Assad. Russia invaded Georgia, but, hey, that was last summer. Now the NATO-Russia Council is to resume meetings and Mr Obama is renewing long-stalled talks with Russia on cutting nuclear weapons (see article).

Those who believe, as the neocons did, that the focus of foreign policy should be to promote liberal democracy, will find much to disapprove of. But a policy of pinching one’s nose and engaging with malodorous regimes has its merits. It treats the world as it is, not as it should be, and it gives awkward customers a chance to change course and co-operate with America without losing face. To foreign-policy realists, that is a nice change from the with-us-or-against-us approach of Mr Bush’s first term, when a lot of countries voted against.

Not just a nice guy, thank goodness

On the other hand, the test of a policy based on realism is whether it delivers results, and engagement on its own, as Mr Bush discovered in his chastened second term, seldom alters the behaviour of regimes that think they are acting rationally in their own vital interests. Look at North Korea, still threatening war after diplomats have spent bottom-numbing years in talks (see article). Or at Iran, which talked and talked to well-meaning Europeans but still insists on its nuclear “rights” (ie, the right to get within a screwdriver’s turn of a bomb). Talk, even from a president as winning as Mr Obama, needs to be accompanied by some hard-edged diplomacy.

Has Mr Obama got the necessary hardness? So it seems. His decision to reinforce the war in Afghanistan while scaling down in Iraq shows that he is not afraid to use America’s military power (though we think he should have stopped America’s counterproductive air raids on terrorists in Pakistan). He recently told Russia that if it helps stop Iran going nuclear, America might drop the plan Russia loathes to station missile defences in Poland and the Czech Republic. This points to a diplomacy based on a shrewd trading of interests, not—despite all that disarming courtesy—a naive faith that noxious regimes will show goodwill just because they are treated with respect.

What remains unclear is not whether Mr Obama is clever or tough. It is his basic reading of the world. Does he see China more as a rival than an ally? Too soon to say. Is Afghanistan winnable? Watch that review. Is Palestine solvable? Mrs Clinton’s recent visit, showing sympathy but changing no policy (Hamas remains beyond the pale), leaves the question dangling. Will he risk pre-emption against Iran or does he believe it can be contained? The mullahs would love to know.

The first big clue to Mr Obama’s instincts may come in his treatment of Russia. A few months ago it looked as if the NATO meeting in April would take place in the shadow of a Russia still in macho mode after the Georgia war and confident of bobbing to riches on oil and gas. To its own surprise, Russia is now a casualty of the world recession.

This does not make America’s policy simpler. A Russia with a wrecked economy may become even less congenial. Mrs Clinton speaks of “managing” differences where they persist, while standing firm on principles and vital interests. But what if interests and principles collide? America says Russia has no right to bully neighbours such as Georgia and Ukraine. But Russia can offer vital help on Iran. So far, Mr Obama has not had to confront these hard choices. Soon he will.

Re: It's an emergency: get your act together, Obama

To
The Editor,
Times

Dear Sir,

This article writer Mr. Anatole Kaletsky doesn't know what he is talking about.

For instance, he says "Germans want to regulate hedge funds, policies that may or may not be desirable, but which have nothing to do with the present crisis" - Has Mr. Kaletsky lost his mind. The present crisis is primarily due to Hedge Fund Managers & Private Equity Players (whether they are purely hedge funds or part of investment banks or part of Sovereign wealth funds or part of banks is immaterial). This is an indisputable fact. Unlike the 1999 crisis when the hedge fund LTME was burnt, this time they got smarter and were not first in the queue. But they were the brains behind all the CDO's and SIV's.

Secondly, the article states that "None of these policies would be painful to voters, since they would involve easier financial conditions, lower taxes, more jobs and stronger guarantees for savings. Why then are they proving so hard to put into practice? " - Is he crazy again to say that none of the measures would be painful to the voters. The whole exercise will be a curse to the voters for the next 20-30 years in the form of extra taxes, low investment in utilities and infrastructure and thereby lower standard of living.

Personally I feel either Mr. Kaletsky is naive or is working for a hedge fund or owns a hedge fund.

Regards,

Pradeep Kabra

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From The Times
March 12, 2009
It's an emergency: get your act together, Obama
As the world's finance ministers gather in London the greatest danger to the global economy is America's failure of resolve
Anatole Kaletsky

This could be the week when the greatest financial crisis in history finally reached its nadir. Then again, it could merely be another week in which a brief rally in global stock markets has suckered more investors, politicians and commentators into assuming that the worst is over, when the tentative improvement in financial confidence is just another false dawn.

So which will it be? The answer depends, even more than usual, on the finance ministers and central bankers gathering at a potentially chaotic G20 meeting this weekend. The omens are not benign.

It is now understood that the global financial system can be stabilised and economic demand revived only through government intervention. Private businesses and consumers do not have the access to credit or the confidence to start spending and investing again. But government intervention will work only with some degree of international co-operation and that requires leadership from America. Yet despite the mandate won by President Obama, Washington has proved muddled in its economic priorities and indecisive in its financial response to the crisis.

International co-operation is necessary because of the global linkages of trade and finance. Any country that allows a bank to fail spreads financial contagion to every other nation. And any country that cuts taxes or boosts public spending or expands its money supply, creates demand not only for its own businesses and workers, but also for the world as a whole.

The upshot is that financial guarantees, fiscal stimulus and credit expansion, will be much more effective and less expensive for each country if they are implemented in a co-ordinated way. By contrast, imagine a global free-for-all, in which some nations subsidise their banks while others try to punish bankers; in which some central banks print money while others grumble about Zimbabwe and Weimar; in which some governments promise to spend their way out of recession while others denounce this as the road to perdition and call for belt-tightening in the public sector. Not only would such divergent policies cancel one another out at the global level, they would also deal another blow to confidence in the world financial system.

But how can global co-operation be achieved when governments around the world seem to have completely divergent economic philosophies and agendas for this weekend? Gordon Brown wants to close down tax havens, while the Germans want to regulate hedge funds, policies that may or may not be desirable, but which have nothing to do with the present crisis. The US is demanding that Germany, Japan and China announce new programmes of public spending and tax cuts - which is simply not going to happen, either this weekend or at the G20 summit next month. The financial markets, meanwhile, are hoping for a $500billion increase in the IMF funds available to rescue insolvent governments, but this does not seem a high priority for any of the G20 governments, except perhaps the Germans, who fear the cost of bailing out Latvia, Hungary, Austria, Greece and the Irish Republic will otherwise fall on them.

Past experience of such international negotiations shows that American leadership is necessary for reaching any kind of agreement. Which brings us to the greatest risk facing the world economy: Mr Obama's failure to present a credible response to the financial crisis or even to assemble a proper economic policy team. After the British Government's leaked messages of despair about nobody answering the phone at the US Treasury in the preparations for the G20, everybody is now aware that Mr Obama has nominated only two out of 18 deputy and assistant Treasury secretaries. What is less widely recognised is that this decision-making vacuum reflects a deeply worrying feature of US economic policy.

American politicians simply don't seem to understand the existential threat that their economy is now facing. Instead of uniting to deal with a national emergency far more threatening to their way of life than the terrorist attacks of 9/11, they have responded by dividing more sharply than ever into hostile partisan camps.

Efforts to revive economic activity and to stabilise the financial system that are clearly indispensable on the basis of any economic analysis, whether Keynesian or monetarist or plain business-sense, have been denounced on the Right for interfering with free markets and on the Left for feather-bedding bankers. Instead of rallying around in a moment of crisis, many Americans are openly expressing their hope that the new President will fail and the economy collapse. Candidates for key Treasury posts have been viciously attacked in the media and Congress for trivial tax and administrative infractions inadvertently committed many years ago or simply for having once worked on Wall Street. As a result, these jobs have become almost impossible to fill.

Mr Obama himself seems to have attached a surprisingly low priority to dealing with the financial crisis. He had, for example, selected key State Department officials, from Hillary Clinton downwards even before his inauguration. He has managed to get dozens of these confirmed by Congress in the past two months and immediately put his personal stamp on US foreign policy. Yet there has been no similar focus on creating a properly functioning economic team or launching a coherent new response to the financial crisis.

The lack of urgency, of focus and of national unity in America's response to the financial crisis is the most surprising - and most dangerous - threat to our chances of recovery. With clear American leadership, a global policy to stabilise the banks and pull the world out of recession could readily be agreed. All the main elements of such a policy - lower taxes, public works programmes, monetary and credit expansion, cast-iron government guarantees for recapitalised banks - are broadly agreed among economists and endorsed by global institutions such as the IMF.

None of these policies would be painful to voters, since they would involve easier financial conditions, lower taxes, more jobs and stronger guarantees for savings. Why then are they proving so hard to put into practice? Is it because many Americans would rather see their economy collapse than a Democratic President succeed? If so, then perhaps the Marxists now enjoying a new lease of life will have been right all along: American capitalism will have proved a decadent civilisation at the end of its global hegemony and doomed to self-destruction.

The White Tiger - A Review

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

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.

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.

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?
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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

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

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.

Dickens & Uncle Sam!

http://www.dailymotion.com/video/x759au_hal-turner-shows-new-amero-currency_news

This is inevitable (Dollar's free fall), as Warrent Buffet said long ago, but this video is interesting. This is what happens when you spend more than you earn.

This reminds me of what Charles Dickens once said:

"Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."

But in this case the misery is not Uncle Sam's.

Back to basics - good old fashioned gold, silver, barter days!!!

Pradeep Kabra

From "A Broken State" to "A Dis-integrated State" - My Plan & Proposal

Friday, 28 November 2008

To

His Excellency Wen Jiabao,
The Premier's Office,
Beijing,
Capital of the Secure & Terrorism-Free China

From

Pradeep Kabra ('The White Tiger')
Still a Patriotic Indian
And an entrepreneur
Presently living in the UK

Sub: From "A Broken State" to "A Dis-integrated State" - My Plan & Proposal

Dear Mr. Jiabao,

I'm a friend of Mr. Aravind Adiga from Mumbai, who introduced you to the famous & rare 'Indian White Tiger' in his last letter. Incidentally, that letter was published and it became a best-seller and won him kudos in the West in the form of the Booker Prize. I'm not looking for any prizes Sir. But I do have a plan & a proposal for you. But first I need to explain the context of my plan.

Oh by the way, I'm sure you might have heard by now the terrible blasts in Mumbai (the financial capital of India) (Luckily, the blasts happened during recession and not during the boom times, otherwise the overall losses would have been terrible. Imagine, human loss and financial loss in billions) Anyway, by now you might also have expressed your sympathies with the Indian Prime Minister and though official thanks will follow, let me express my gratitude for your empathy in these troubled times.

I am very hurt and angry at these senseless killings like any patriotic Indian and any sensible citizen of the world (except of-course my terrorist friends. Oh yes, I can't call them my enemies sir, not yet. Otherwise, they will start targeting me and my family. I can't take that risk. Not yet.)

But sir, I'm different (because I'm that rare 'White Tiger' you see). I don't want to go into the root-cause-analysis. You pickup any newspaper or go to any website, you will get all the reasons and causes for the attacks. I'm a MAN OF ACTION. I would rather go for the Solutions.

I have a 3 decade plan - divided into three parts to solve this problem permanently.
Decade 1 - 2009-2018 AD - 1. Implementing the Rule of Law Internally withing India (irrespective of caste, creed, religion, connections, contacts etc.,) 2. Building up the Infrastructure (including basic facilities like drinking water, electricity, roads, ports etc.,) 3. Providing Education (including atleast basic literacy to all the kids)
Decade 2 - 2019-2028 AD - 1. Sustaining Education (Including basic literacy, computing skills, internet skills and advanced literacy) 2. Speeding up the Infrastructure (Including motorways, Airports, internet access, high-tech facilities etc.,) 3. Maintaining the Rule of Law within India (irrespective of caste, creed, religion, connections, contacts etc.,)
Decade 3 - 2029-2038 AD - 1. 2. & 3. - Sustaining & Modernizing "Education-Infrastructure-Law&Order"

That's all. If it sound's too simplistic to my Indian friends - I suggest - TRY IT!!!
As one of my teachers always used to say, without trying, you would never know if it works or not.

But Mr. Jiabao, the problem in India is, they think (most of them I mean, except of-course the 'White Tigers') that it is 'God's Will' and God will come in the new Avataar to correct these ills. But I differ with them of-course.

The government's official explanation for it's incompetency in implementing this 3-decade development plan is that it is too busy managing the security of the country (unsuccessfully though, as the spate of coordinated multi-city bomb blasts exposes the Congress government's ineptitude)

My proposal is "Why not out-source the country's security" (Japan, Germany, South-Korea have been doing it successfully for the last 6 decades to the Americans and hence they could concentrate on their economy and today as you know Mr. Jiabao, Japan is the second largest economy in the world and largest in Asia. Germany is the largest economy in Europe and the largest exporter of the world).

Where my proposal differs from the past is - Outsource the security of India not to the Americans but to the Chinese.
(Sorry Mr. Obama, though I admire you, I can't give you the first offer because of three reasons - a) I believe in 'Love Thy Neighbor' Policy b) I believe outsourcing should never be far away...just in case c) I believe China will be the next super power by 2025. So get the first mover advantage.)

Don't be so shocked Mr. Jiabao. We Indians are very good students. We always seek knowledge.

First the Moughals came and taught us the importance of beauty (remember Taj Mahal), introduced us to a new religion (Islam), United the whole country (remember Emperor Akbar the Great).
Then we allowed the Britishers (after the 3 way auction between Brits, Portuguese & Dutch) to teach us the Rule of Law, modern infrastructure (remember the great Indian railways), sports (remember cricket) & of-course the pride of India (Indian Democracy)

If you are surprised at my interpretation Mr. Jiabao, I know because you might have been reading the History books from India, where they say, first the Moughals 'looted' the country and then the Britishers 'plundered' it. Utter Nonsense. That is not true at all. We still have the Taj Mahal, the Great Indian Railways, Cricket & the famous Indian Democracy as a proof to prove my point.

Anyway, now you might be thinking Mr. Jiabao that what can we Indians, possibly learn from China. Well, I can think of two great things along with your 'protection' from the Terrorists of-course a) your fabled discipline b) your Olympic records.

So by now, Mr. Jiabao, you must have got the gist of my 'proposal'. Please don't hesitate to forward the same proposal to our Prime Minister. Our PM is a Harvard graduate, highly educated, open-minded, intellectual chap. (controlled by an Italian of-course). Presently he is discussing the 'Mumbai Attacks' with his Pakistani counterpart Mr. Zardari & the chief of fabled Pakistan Secret Service ISI is visiting India to find out the "root cause" of the issue. I'm sure Sir, he will be open to your 'proposal'!!!

If it works out Mr. Jiabao, please don't forget that it was "my idea" in the first place. I'm open to negotiations on the royalty terms (but you should understand my constraints in the first place. Like any innovative entrepreneur in India, I have to share a large portion of the proceeds with all my politician friends)

I hope you will consider my proposal with the right earnest.

Looking forward to hearing from you soon.

Yours Sincerely

Pradeep Kabra "The White Tiger"
Presently living in the UK

PS: Please respond quickly to my proposal Mr. Jiabao, because I need to take a quick decision on this issue before the terrorists strike again. I can't wait for long because I'm worried that from a 'Broken State' my country will degenerate quickly into a 'Disintegrated State'. As a "Born Patriotic Indian Entrepreneur" I can't allow that to happen Mr. Jiabao.
Also, if you are not interested then let me know, I can then invite the Americans. I'm sure Mr. Obama will be too glad to oblige!!!

T R U S T

TRUST - This five letter word is the basis of every activity (financial or other-wise) taking place on this planet. Whether we believe in it or not, it is still the bedrock of societies.

In Banking and Finance, it is more obvious because "banks lend long and borrow short" So whatever the technical reason (in the present financial crisis, the reasons are quite a few including easy monetary policies, emergence of China, savings from developing world into developed world, crooked rating agencies, regulators playing catching-up, emergence of technology, last but not the least - greed etc...)for the present crisis, the basis of it is 'LACK OF TRUST'

The obvious solution to this problem is to create conditions to rebuild the trust. One cannot, I insist cannot rebuild the trust by hoping the crooks will reform. This just doesn't happen. One can only rebuild the trust by separating the crooks from the good and then creating a level playing field. (In banking parlance, this means, know the exact position of each bank/financial institution and let the weaker ones go down) Ofcourse this will lead to some short-term intense pain, but it will help to bring the good one's together and create a stronger system for the good of all. And it will be quick & efficient as well.

What then are the great minds across the world doing to solve this problem? They are, in my opinion 'falling in the trap' of 'hope' rather than playing it straight with action as a basis. They are assuming that putting good money (to begin with, 3-4 trillion dollars) behind bad without separating the good from the bad players will rebuild the trust. This is where I believe, they forget the basics. The trust is not built upon money, it is inherent till somebody disturbs it. The only way to rebuilt it is by separating wheat from the chaff. Let the crook banks & institutions go down.

This is not just basics & common-sense but it's the truth. But how so many great minds come together in a room and still take so many stupid decisions is beyond my grasp. It reminds me of what Warren Buffet said once in his MBA Talks 'Why Smart People do Dumb Things' - Ex: The 16 genuinely genuises in 'Long Term Capital', to make the money they didn't have and didn't need they risked everything they had and they need. And that's foolish. Just plain foolish.
http://in.youtube.com/watch?v=C1LiATYSajw&NR=1

Pradeep Kabra

Globalization & Protectionism

I agree with the globalization effect remark. Also I think poor/middle-class in West will also suffer. Will that effect politically to bring protectionism? I think that will depend of how deep the recession will be. Whether the policy-makers will throw good money after bad or will allow the bad banks/institutions to go down and let the stronger ones take-over?

The present attitude is not encouraging. thoughThat's why Inspite of throwing almost 3-4 trillion of good money, the markets are still punishing. Let's see. - Pradeep Kabra

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Re: Tough times ahead. India and China will suffer more in my ( guarded ) opinion while the poor countries in Africa will get poorer. The world is now so tightly linked through Globalisation. It is like a human body, you prick the base of your foot with a pin, the whole body gets disabled! - Aslam Merchant

The 'Inconvenient ' Truth

Dear Friends,

We all are/will be affected by the present financial/economic crisis across the markets of the world. Nobody knows how long will this last or how severe will it be. But are the responsible people doing their jobs correctly?

I thought I will share this fantastic article which explains not just the desperate measures of the 'central bankers' across the world but also offers a simple solution.

I'm surprised to see even most of the 'top economists' falling in the same panic-trap. This analysis is by a former finance minister of 'El Salvador' (yes, that's true) & it is spot on. Though his analysis is based on US actions, EU, UK, rest of the world central bankers/governments are doing something similarly stupid all in the name of 'saving the economy from deep recession'. What a sham. If you don't believe me, after reading this article, listen to any of the videos of 'Gordon Brown' on BBC/Youtube, (The one with Nick Robinson on BBC was a classic) on what actions he is taking to save the economy, and you will see what a fool he is. You will find various versions of Gordons across the world.

The 'inconvenient truth' is that we are in a deep hole (thanks primarily to our 'banker' friends) & the only way to come out of it is to expose & expel the culprits by letting them go down. This is exactly how Mr.JP Morgan sorted a similar scenario in 1909. He called all the bankers in a room, asked/forced them to reveal their exact position (on a piece of paper, remember there were no computers/mobiles then) and then letting the weakest ones go bankrupt. So Simple.

The irony is that one doesn't need to be an economist to come to this conclusion. It's common-sense!!!

Pradeep Kabra

Re: It's Time for Banks To Put Their Chips On the Table by Mr. Hinds in Wall Street Journal, 10-Oct-2008

The Federal Reserve injected $480 billion domestically and globally last week and it doubled the dose Monday, injecting more than $900 billion in one single day. Yet banks are still refusing to lend to each other, and when they do lend they charge a record-high risk premium—which more than cancels out any Fed rate reductions. At the same time, banks have absorbed about $1.5 trillion in cash from the Fed, more than twice the most likely loss in the mortgage markets (about $600 billion).

What we are witnessing is what economists call a rise in the liquidity preference, which was the main factor leading to the Great Depression. Investors aim to increase the share of liquid instruments in their total assets. For the banks it means they want to liquidate loans and transfer the proceeds to very liquid instruments.

This migration depresses the economy by reducing credit. The solution is not to keep on throwing money at the banks, which are inclined to hoard it not lend it. Rather, what is needed is stopping the skyrocketing increase in their liquidity preference and then lowering it. Doing that requires writing off the losses.

Imagine that you are playing poker with 10 people and that you learn that a minority of them is broke and would not pay you if they lose. You don't know, however, who the ones are who won't pay. Any rational card player would stop making bets until the true solvency position of each player is revealed and the bankrupt ones are expelled from the game. This is what is happening in the banking system—only worse, because in poker you would only fail to collect the pot if you played with an insolvent player, while in the banking system you would lose your bets if you lend to an insolvent bank. Liquidity preference will not subside until the losses are made explicit, written off and absorbed.

To achieve this you simply let the illiquid borrowers and their financiers go bankrupt. This is how financial crises were solved in the 19th century. The method was expensive because commercial banks are central to the operation of the payments system and their uncontrolled failure can cause enormous damage to the economy.

Yet continuing to play poker with failed players, also causes enormous damage. This is because the resources that could be used to spur economic recovery are not allocated due to lack of information. Worse still, resources are taken from the efficient to keep insolvent banks and companies operating.

The $700 billion rescue fund can be used for absorbing the losses and weeding out the failed players. By forcing the failed commercial banks to write off their losses then asking the owners to compensate for the losses with new capital. If they don't do it, the government takes over and recapitalizes the banks by purchasing the bad loans at their nominal value (as if they had not been written off). This no longer benefits the previous owners, who have already abandoned the table. The government then sells the banks, making a loss equal to the write-offs.

The $700 billion rescue fund should not be used to hide the losses in the accounts of the financial system by pretending that the government will recover all of them, as is the case now. This will only prolong the paralysis of the world economy, and ruin an otherwise winnable poker game.

(Mr. Hinds, a financial consultant and former finance minister of El Salvador, is the author of "Playing Monopoly with the Devil: Dollarization and Domestic Currencies in Developing Countries" (Yale University Press, 2006).)

India 'Shining'

All the talk of 'India shining' is bullshit. This editorial in today's Financial Times captures the exact problem and it's solution facing India. The big question is WHO WILL IMPLEMENT IT? With the explosive mix of 'democracy' (a good excuse to do nothing) & 'corruption' (not just the politicians but also the people's 'chalta hai' attitude') it looks like 'india shining' is far-far away.

OK. If this sounds, very pessimistic, it would be nice to hear what India Optimists have to say on this.

It reminds me of a funny incident - once I was having a similar kind of debate with a friend of mine after many arguments-counter arguments, he said (passionately) - If India was not a 'Democracy' we wouldn't be having this discussion at all. Isn't that wonderful!!!

-- Pradeep Kabra

Re: India's tricky path to industrialisation; Without industry the mass of Indians will always be poor - Financial Times Editorial - 07-Oct-2008;

It should have been a perfect marriage. Ratan Tata, the acceptable face of Indian capitalism, and the Communist party rulers of West Bengal, a late convert to the cause of industrialisation and a friend to India's poor. Instead, the attempt to negotiate a tiny plot of land for India's most imaginative industrial project, construction of the $2,200 per unit Nano mini-car factory, has ended in defeat. Why?

For all its claim to be socially responsible, Tata has taken a don't-look, don't-see approach. It outsourced the task of acquiring land to politicians who, according to one commentator, can be "bought and sold like vegetables".

Peasants in 18th-century Britain were thrown off the land. Enclosure acts reduced the commons, pushing people from the countryside to become fodder for industrialisation. Similarly, China has managed the process of industrialisation reasonably smoothly: by force and without the niceties of land rights.

For better or for worse, India became a democracy before it set off seriously on the road to industrialisation. Moreover, it is a democracy where minority causes, even that of 400 hold-out farmers in West Bengal, can hold the national good to ransom. That, in part, explains why roughly half of the Chinese population is now urban while, in India, just over 22 per cent lives – often in squalid conditions – in the cities.

Make no mistake. If India cannot industrialise, it will never be prosperous. Those who defend the status quo are condemning hundreds of millions of peasants to a life of back-breaking and unproductive toil, and the often violent discrimination of the caste system. Romanticising village life is something villagers cannot afford. The average Indian farmer lives a shorter and more brutish life than the most humble of nouveau-urban Chinese.

So what is to be done? First, clear rules need to be set – and transparently implemented – for purchasing agricultural land. Fair compensation must be paid and, when necessary, alternative work found. If farmers are merely dispossessed in the vague hope that they will drift to the cities, India will inevitably suffer violent peasant revolt.

Second, cities must be made more attractive. India should spend on infrastructure to make towns a bigger draw. If migrants know that urban living offers water, electricity, decent housing and the chance of better health and education for themselves and their children, cities will become places where people want to live. Few were thrown off the land when Japan and South Korea were industrialising. But they came to the cities anyway.

Third, the government must invest in rural health and education. Even if India truly wanted to industrialise, it lacks the human capital to do so. Many of the poorly educated, undernourished products of India's rural idyll are simply not skilled or healthy enough to join the global workforce. Unless they can be made so, India will always lag behind. It will be a country with a tiny minority of computer engineers and call-centre operators and a vast majority of subsistence farmers. In other words, it will be poor, very poor.