Pendulum effect and our politics

we are what we are..

You all might have heard about Pendulum theory in physics.If my memory serves me right, it was Galileo who understood and codified this Pendulum theory based on gravity and motion and all the clocks in the world had pendulums which go back and forth keeping up the time interval between their swings.

Based on this pendulum movement there is a theory called Pendulum effect. This is applicable for culture, politics, economics and even in our behaviours.When the Pendulum is pulled to one extreme, this Pendulum effect clearly says that pendulum will swing back to the other extreme with force, motion and vengence ! Signs of this effect is most visible in administration. When there is laxity in enforcement of rules of banking norms and when NPAs swelled , RBI and the state banks swung into action. The rules have been overtightened and even good and genuine borrowers are made to feel the heat and sweat so much so that all borrowers are first considered defaulters or atleast potential defaulters. Borrowers with even good standing will have to prove their genuineness ,demonstrate their innocence and prove that they are not guilty ! PSu banks have swung from the other extreme to this extreme.

Same is the case in Politics. When X politician was arrested and jailed there was widespread resentment against the govt. of the day and Politician Y who masterminded it. After elections the politician X gains prominence and seeks revenge on politician Y by putting him behind bars settling his scores.The pendulum has swung to the other extreme.

But when the pendulum will come to rest.This is a million dollar question and pendulum can come to rest only when we follow the foot steps of statesmen saints like Gandhiji who advised that an eye for an eye will make the whole world blind.

Somebody should have the will to stop the Pendulum.

Astrology and eclipses

We are what we are...

Many of my relatives and friends are interested in Vedic astrology and they used to ask how the gaze of planets affect the mortals like us.And now Dec 26th Solar eclipse has kindled all kinds of predictions incl. earth shattering apocalypses and highly disturbing personal experiences. Is there any scientific basis for this.?

Even those who are otherwise theists, do not believe in this planetary influences as there are no direct scientific proof or evidence for this. However many of them from their personal experiences know that Moon/Lunar movements cause disturbances on the mental health of some of their well acquainted persons. Of course they all have witnessed the rising tides in the sea depending on lunar positions which has scientific proof .

I used to explain them vedic astrology on the basis of both observations i.e pramana as well as inferences i.e anumana. My explanations are like this: 1) Your horoscope is like your SSLC mark sheet. It shows how well or bad is your accumulation of past karma and reveals the structure of your personality based on this.Like saying that in your SSLC exam if you had scored high marks in say English, it would be good if you pursue your higher studies in English, your astrology chart shows the tendencies for future course depending on your karma accumulation. This is the simple way of explaining the horoscope.
2)Also one should remember the interplay of karmas that we continuously accumulate from our 12th year. So, these should be taken in our strides and when there is confusion we can consult our birth horoscope and understand the tendencies projected by planetary positions. 
3)there are many permutations and combinations of planets ,their houses, rules for interpretations and exceptions etc. described in our vedic texts,many schools of vedic astrology have come up  and , therefore, no one person can claim himself a master of all.

Final caveat: As the sanskrit sloka on astrology says, noone except Brahma,the Creator, can make cent percent accurate predictions. An astrologer who has recited Gayathri mantra regularly, who does not take money for astrological consultations and who leads a pious life can be 2/3rds accurate in his predictions, according to the dictum of our rishis.

Banks and the security for the loan

Many a time whenever Banks lend , they try to cover their risk with a primary security as well as a Collateral security. Collateral as the meaning indicates is only  secondary . It is additional to the primary security.

But many banks insist Primary as well as adequate Collateral Security since the Primary security may lose value over time and use. Mostly movable fixed assets like plant and Machinery are given as primary security but these assets get depreciated over the period of their use.As a backup Banks will ask for a Collateral to have sufficient cover for the value of the loan.

Banks in India esp. PSU banks adopted a funny logic while lending to King Fisher airlines which went phut after crash landing some years back. The logic was valuing the brand KingFisher Airlines and use it as a Collateral for the loans extended to the airlines.But when the airlines went down the drain , the Brand also lost its value and as a result Banks lost their money. So such Collateral ingenuity invented by the unscrupulous led to PSU Banks' rut. 3Cs expected of the borrower are presumed to be present with the banker or lender. If they are absent on either side or on both sides then the Tax payer bears the brunt. This is the biggest moral hazard of the financial sector of any country and more so of India.

In Ramayana, when Lord Rama was in the forest, his younger brother Bharatha came to invite him back to the country and anoint himself as the King of Ayodhya.Instead Rama gave his sandals as requested by Bharatha and Rama remained in the forest. the sandals were placed on the throne representing Rama.There is a beautiful hymn sung by Swamy Desika in which he says Sandals of the Lord are valued much more than the Lord Himself because Rama was released by Bharatha by taking his sandals as security!!!Finally Rama kept his word, came back and redeemed his sandals.!!

Therefore one must understand that the security perse is not of much intrinsic value if it is not backed up by the most important C-Character. The security should have a moral binding on the borrower and the value of the security is dependant on the strength of this binding.

My banker friends would vouch for that!

RBI and the Onion!!

We are what we are!!

RBI was widely expected to cut the repo rate yesterday but it refrained from it springing a surprise. Central bank should always use monetary policy as a weapon and it is most effective when weapon is wielded with a veil of secrecy and surprise.

But to some extent RBI's prognosis of inflation seems to have been influenced in general by food inflation and in particular by onion .The skyrocketing prices of onion caught the eyes of the Governor and his monetary policy team to unanimously decide  against rate cut and push the pause button. Governor justified this decision by emphasising that the mandate to RBI given by Parliament is only to contain inflation.

There is a Taylor rule or principle in containing inflation by the Central bank. According to this rule Central bank tends to raise the nominal interest rate by more than 100 bps for every 100bps increase in inflation. So, in simple terms, Central bank will have to use a bigger weapon to tame the animal called inflation. However this can work effectively only in the short or short to medium term. There is a Golden Ratio that exist between the interest rate and the inflation rate and this ratio is delicate , flexible and brittle if not peppered with the element of surprise. If this is not deployed properly Milton Friedman and others cautioned us saying that inflation will tend to catch up with the interest rate which moves at higher proportion, when efficiencies and productivity in the economy are in low key.

Then what is effective in the long run? Keynes comes to our rescue by saying "in the long run we are all dead". Perhaps , that is why Economics is called "Dismal science"!! But Onions keep it lively!!

Movies and our Social behaviour and Cultural values!

We are what we are!

India has a long and rich cultural history. Perhaps it is the one and the only culture which has to its credit Lord Shiva coming down to our world to compose a poem in chaste Tamil , Lord Vishnu going behind a Tamil Poet obeying his command and Lord Ganesha  writing the verses composed by Ved Vyas, using His tusk as pen.

Such mystic stories weaved around mythological figures have been a tradition in India to highlight the importance of values and ethics in our day to day life. Ithihasas like Ramayana,Mahabharatha have her oes who have lived a dutiful life as shining examples for the common milieu.

Why this long preamble is required is due to the fact that stories have a strong influence on people in shaping their social behaviour .Since man is a social animal and as he is likely to fall prey to bad habits because there is a natural tendency for vile habits to take quick control of him.He has an attraction for such socially unacceptable habits and behaviour and so our ancestors understood this and wrote stories which will provide him a moral compass guiding him in his life journey making him useful for the society and the nation in general.

Even thirty years back our movies reflected our modern times but were grounded in age old ethical values and cultural heritage. But nowadays movies in the guise of being realistic, have started portraying anti-heroes as models. Such anti-heroes remain as bundle of contradictions- womaniser, drunkard, drug addicts,wayward and what not , but they yearn for the love of their lover!! They will not listen to their parents living a rowdy life  but will want to straighten the politicians and the corrupt.!! Not only heroes, heroines are also exhibiting such socially unacceptable behaviour like drinking, having sex with their lover before marriage .

What kind of degraded social and individual values we are bequeathing to our children in the garb of realism. Do we realise that we have not inherited this world from our parents but we have actually borrowed it from our children to whom we should leave footprints for them to follow with their baby steps and blossom.

Quo vadis!

Are we degenerating into a Cynical nation?

We are what we are!!

There are headlines screaming " Indian economy is in ICU", "India back to Hindu rate of growth" etc.All this scare mongering is to catch your eyes and blame Modi for the economy in dire straits.

When official CSO numbers were put out at 8%, some economists continued to say it is only 5.5% as it is overstated by 2.5% with their own back of the envelope calculations. In the past, when UPA was in Govt. its own FM doubted CSO methodology when GDP was down at 4.3% and now we are quoting and looking at him to offer solutions to today's GDP problem. Are we all suffering from dementia or selective amnesia?

When former CEA doubts GDP calculations , we tend to denounce CSO nos. but when Govt in power says NSS methodology for estimating consumer spending is not robust, we mock at the Govt. Why such double standards?

We collectively want to be "doubting Thomases" always and keep criticizing our own duly elected Govt. making fun of it.On top of it, we say it is intolerant when we make fun of it.

Without an iota of evidence, a group of bankrupt and the corrupt wanted to derail Rafale jet purchase and filed a petition in SC .Even after it has been thrown out by SC and the politician who called PM Chor, being censured by SC,we still write cock and bull stories about the deal by quoting few lines of one of the judges out of context. We are not bothered about IAF not receiving jets in time and thereby the nation's defence getting compromised. For a minute we do not want to hold previous UPA govt. for dithering in this crucial defence purchase and we have not questioned them for dragging on this purchase .

We all know that the previous UPA govts. went on and on in postponing GST implementation despite an Economist PM at the helm, who knew GST is good for India.Finally Modi had to bite the bullet in 2017 and when the Govt and GST council  faced a dilemma of half baked GST or no GST, everybody knew that it would be half baked GST .State GST council had Congress ruled states also and they were also party to this from day one of GST implementation. I am not for a minute justifying the GST goofups and bloomers and the myriad forms and reports our tax bureaucracy wants us to file. But did we question UPA as to why it kept on dragging its feet endlessly on GST implementation.

I think we are degenerating into a cynical nation!