Tag: reading

Chinese Fried Rise

Chinese wall

Image by rvw via Flickr

I am sick and tired of hearing about how China is “awesome” and India “sucks” when it comes to infrastructure. Sure, we have our bureaucracy and corruption, but its nothing compared to the scale at which it occurs in China. For us, a down day is when farmers refuse to pay back SKS. Compare that with Chinese bank loans that stood at $6,500 per capita in 2010 compared to gross domestic product (GDP) per capita of $4,400.

And their much envied high speed trains? It is a $330 billion scam where railway bridges were constructed by untrained unskilled migrant workers and rocks and gravel were tossed into pier foundations instead of concrete. Take this: when two bullet trains collided in July 2011, bulldozers buried the rubble even as bodies fell out of the windows of the carriages.

So what about the growth miracle? Sure, China is to manufacturing as India is to IT & BPO. But they seem to have lost their way when their “planned” economy allowed property construction to take up 13% of their GDP (from 3% in 1999) compared to 5% in India.

Yes, we flushed $7.82 billion down the NREGA. But we have nothing on the 18,000 officials who have fled the country taking a combined $126 billion dollars with them.

So the next time you wish for the Chinese miracle in India, keep in mind that our bottom-up economy, for all its messiness, is still better than one that is centrally planned and top-down.

Sell in December and go away?

Seasonality affects stocks. It’s a fact that a number of pundits have tried to answer the ‘why?’ and the ‘how?’ of it. But first, lets look at the numbers in this handy chart:


Now carefully look at December and January. Its almost a guaranty that the market melts up in December and goes down in January.

If you are in the market, enjoy the rally till Christmas and get out! If you are not getting paid to be a hero, then why try to be a superman?

In fact, it looks like you can stay out of the market till April, or maybe comeback only in July? Something to think about…

As to the “why” and the “how”? Well, the US markets enjoy a Santa Claus rally (most of the time) and it does have affect other markets. Also, portfolio managers looking to do some window dressing might be tempted to play high-beta emerging market stocks, so India might be benefiting from that. But who cares? With the global market teetering on the European experiment gone bad, why take changes? Book profits instead!

Urbanization is a Good Thing

Peepli Live

Image via Wikipedia

I watched this movie called Peepli Live, produced by Amir Khan. The story revolves around an indebted farmer who, facing a large debt, contemplates suicide. Its an interesting movie. However, right at the end, there’s commentary as to how millions of low-income farmers are being forced to forgo their (small) land-holdings and migrate to the city. Here’s the thing: I don’t see it as a bad thing that needs to be reversed. Rather, the role of the government and society should be to ease the transition.

Urbanization allows efficient allocation of public services. It is easier to serve a city with 10 schools rather than 10 small villages with 1 school. The problem is that by portraying urbanization as bad, subsistence farming as good we are trying to swim against the tide and misallocating capital (like the insanely evil NREGA.) We would be better off focusing on easing the transition that is already taking place by focusing on city planning.

Subsistence farming was never a good idea. Lack of scale and under-capitalization implies that millions of farmers in India lead a hand-to-mouth existence. We should be focusing on providing better options for livelihood generation rather than putting poverty on the pedestal and trying to wish the problem away.

Urbanization is a good thing and it is going to continue being a predominant trend of our times. Deal with it.

Digital Creativity?

Sand printer, presented at SIGGRAPH 2004

Image via Wikipedia

I still remember fooling around with Coral Draw when I was in school. I was completely in love with it back then. And somewhere in the haze of home works and exams, I lost touch with it. Today, I experienced the same old feeling watching a buddy of mine work on Photoshop. He was explaining how buttons are made: the shading, highlights, brightness gradients etc. And then it hit me: just about every form of creativity is going digital.

What started with expensive 2D animation tools for movies have crossed over to the consumer domain. Be it Photoshop, Avid, Instagram or Windows Live Movie Maker, artists have access to a amazingly powerful set of tools to express their creativity. And its not just images that have gone digital, it’s the entire universe of content including music and writing. And it is not just two dimensions either, I know at least two startups who are working on consumer 3D printing. Just like how engineers moved from the slide-rule to CAD/CAM, future artists would’ve seen the easel only in museums.

So what does it mean to the creative process? One thing for sure: more. The one giant advantage that digital creation offers is the undo button. You no longer have to throw away a perfectly good copy just because you smudged the corner. It allows the artist to be do more. And with all things digital, the artist who knows a little bit of programming would have a natural advantage in this scheme of things. Take a look at Scott Draves: a “software artist.” I ran into to him in SIGGRAPH (a computer graphics conference) where he was presenting digital art when it was still in its infancy. As tools get more powerful and mobile, we are headed towards an exciting convergence between art and computer science.

Hello Mr. Artist, got Python?