Google and Microsoft : battle of the apps

No, this is not about how much clout or market share each hold.
Of late i've noticed Microsoft offering a host of new services apart from it's core sector of Windows operating system. This link shows the current host of services being offered by Microsoft for free. Google though ahead in the race for internet dominance will have to watch it's back. It may take ages for Microsoft to come up with these many services but who knows Microsoft may just beat the leader.

P.S. : I tried out the Writer. It's awesome.

A Shocker for the Creative Shocker

An reader of this blog sent me this link : 

http://en.wikipedia.org/wiki/Shocker_(hand_gesture) 

p.s. had a beautiful and insightful walk spanning Queens-Brooklyn-Manhattan. 

http://www.flickr.com/photos/creativeshocker

What triggered the current financial crisis in US?

Ever wanted to know the basic reason behind this financial crisis in US and subsequently in India? Here is a valuable abstract from an article from TOI.

Q: What is a sub-prime loan?

A: In the US, borrowers are rated either as 'prime' - indicating that they have a good credit rating based on their track record - or as 'sub-prime', meaning their track record in repaying loans has been below par. Loans given to sub-prime borrowers, something banks would normally be reluctant to do, are categorized as sub-prime loans. Typically, it is the poor and the young who form the bulk of sub-prime borrowers. 

Q: Why loans were given?

A: In roughly five years leading up to 2007, many banks started giving loans to sub-prime borrowers, typically through subsidiaries. They did so because they believed that the real estate boom, which had more than doubled home prices in the US since 1997, would allow even people with dodgy credit backgrounds to repay on the loans they were taking to buy or build homes. Government also encouraged lenders to lend to sub-prime borrowers, arguing that this would help even the poor and young to buy houses. 

With stock markets booming and the system flush with liquidity, many big fund investors like hedge funds and mutual funds saw sub-prime loan portfolios as attractive investment opportunities. Hence, they bought such portfolios from the original lenders. This in turn meant the lenders had fresh funds to lend. The subprime loan market thus became a fast growing segment. 

Q: What was the interest rate on sub-prime loans?

A: Since the risk of default on such loans was higher, the interest rate charged on sub-prime loans was typically about two percentage points higher than the interest on prime loans. This, of course, only added to the risk of sub-prime borrowers defaulting. The repayment capacity of sub-prime borrowers was in any case doubtful. The higher interest rate additionally meant substantially higher EMIs than for prime borrowers, further raising the risk of default. Further, lenders devised new instruments to reach out to more sub-prime borrowers. Being flush with funds they were willing to compromise on prudential norms. In one of the instruments they devised, they asked the borrowers to pay only the interest portion to begin with. The repayment of the principal portion was to start after two years.

Q: How did this turn into a crisis?

A: The housing boom in the US started petering out in 2007. One major reason was that the boom had led to a massive increase in the supply of housing. Thus house prices started falling. This increased the default rate among subprime borrowers, many of whom were no longer able or willing to pay through their nose to buy a house that was declining in value. Since in home loans in the US, the collateral is typically the home being bought, this increased the supply of houses for sale while lowering the demand, thereby lowering prices even further and setting off a vicious cycle. That this coincided with a slowdown in the US economy only made matters worse. Estimates are that US housing prices have dropped by almost 50% from their peak in 2006 in some cases. The declining value of the collateral means that lenders are left with less than the value of their loans and hence have to book losses.

Q: How did this become a systemic crisis?

A: One major reason is that the original lenders had further sold their portfolios to other players in the market. There were also complex derivatives developed based on the loan portfolios, which were also sold to other players, some of whom then sold it on further and so on.
As a result, nobody is absolutely sure what the size of the losses will be when the dust ultimately settles down. Nobody is also very sure exactly who will take how much of a hit. It is also important to realise that the crisis has not affected only reckless lenders. For instance, Freddie Mac and Fannie Mae, which owned or guaranteed more than half of the roughly $12 trillion outstanding in home mortgages in the US, were widely perceived as being more prudent than most in their lending practices. However, the housing bust meant that they too had to suffer losses — $14 billion combined in the last four quarters - because of declining prices for their collateral and increased default rates.
The forced retreat of these two mortgage giants from the market, of course, only adds to every other player's woes.

Q: What has been the impact of the crisis?

A: Global banks and brokerages have had to write off an estimated $512 billion in sub-prime losses so far, with the largest hits taken by Citigroup ($55.1 bn) and Merrill Lynch ($52.2 bn). A little more than half of these losses, or $260 bn, have been suffered by US-based firms, $227 billion by European firms and a relatively modest $24 bn by Asian ones. Despite efforts by the US Federal Reserve to offer some financial assistance to the beleaguered financial sector, it has led to the collapse of Bear Sterns, one of the world's largest investment banks and securities trading firm. Bear Sterns was bought out by JP Morgan Chase with some help from the Fed.
The crisis has also seen Lehman Brothers - the fourth largest investment bank in the US - file for bankruptcy. Merrill Lynch has been bought out by Bank of America. Freddie Mac and Fannie Mae have effectively been nationalized to prevent them from going under.
Reports suggest that insurance major AIG (American Insurance Group) is also under severe pressure and has asked for a $40 bn bridge loan to tide over the crisis. If AIG also collapses, that would really test the entire financial sector.

Q: How is the rest of the world affected?

A: Apart from the fact that banks based in other parts of the world also suffered losses from the subprime market, there are two major ways in which the effect is felt across the globe. First, the US is the biggest borrower in the world since most countries hold their foreign exchange reserves in dollars and invest them in US securities.
Thus, any crisis in the US has a direct bearing on other countries, particularly those with large reserves like Japan, China and - to a lesser extent - India. Also, since global equity markets are closely interlinked through institutional investors, any crisis affecting these investors sees a contagion effect throughout the world.


A heavily negative feature on the USA financial crisis by TV-9

Flavors - The movie

A movie that's refreshingly good !

In Your Face

So it was one of those calm afternoons which I had to myself sitting in the corner most table at the mexican taco (incidentally it has the best view of the busy Brooklyn street) munching away my burito and swaying to the kudha jaane number. And it is in moments like this that my karma decides to ball me. So here comes a chinese/japnese/korean/nepali or what ever you call those yellow people and of all the empty tables in the Taco sits beside me. And for extra nuisance we had this african american guy coming and showing us his questionable id saying that he worked for a children's organisation and was collecting funds. To me he appeared stoned so the philanthropist in me din't tug at my heart strings to donate some small change. The oriental guy on the other hand got aggresive and after the beggar left started cribbing on how in today's times it was not possible to trust anyone. I din't pay any heed to his rants and continued munching my food. suddenly he focuses all his attention on me and asks me : " are you pakistani ? " i neat frown begins to appear on my face and he noticing this asks oh ok ok " srilankan ? " the frown manifests. " oh i get it. u r indian right ? " i just nod. He takes my nod to be a sign of approval for the chat to continue and says " india and pakistan no good ? " before i could reply " always fighting for a piece of land. man u guys need to get a life."

in any conversation involving me i generally like to be the guy who's doing all the talking. The chinki dude seemed to enjoy my evident discomfort at an issue which swells national pride in any Indian. Instead of telling him to shut the fuck up I sarcastically asked :
"where you from : China/japan/Taiwan/Nepal/Burma/Indonesia/Bhutan/Korea? cos you all look the same to me."
The oriental guy : " i'm from china "
CS: China ? well, china has an amazing record when it comes to violating human rights. The vast majority of pirated products come from China. Is that ray ban you are wearing real ? China is a world leader in pollution. Do you guys ever check your carbon footprints (ok ok i was dazzling hime with bullshit here !) You guys have/had disputes with India, Brunei, Vietnam, Malaysia, Taiwan, and Japan.
Now tell me who needs to get a life ?

In you face Chinki saale!

Acquire, Merge and Fire

Bank of America buys Merrill for $50 billion.

"At the same time, a merger between Bank of America (BAC, Fortune 500) and Merrill Lynch (MER, Fortune 500) will also "inevitably result in more layoffs," said John Challenger, chief executive of global outplacement firm Challenger, Gray & Christmas, adding to the tens of thousands of layoffs that have already occurred this year on Wall Street." - CNN MONEY

HP announces 24,600 layoffs in wake of EDS acquisition.
"HP chief Mark Hurd says that unless the combined companies can operate efficiently, they can't grow." - computer world


Interesting Read's :

of mergers and acquisitions

The Human Side of Mergers: Those Laid Off and Those Left Aboard

Mergers, Acquisitions and Takeovers

Underdog Who ?

From : greatandhra.com

This might come as a shock to you but then there was a time when Megastar Chiranjeevi was said to be feeling quite inferior about an actor and he is none other than the famous comedian star Sudhakar. Apparently, both of them were students at the Madhu film institute and Sudhakar was supposed to be the king of mime. The instructors used to say that he has a gift for mime and come out with some real good expressions and hence he would become a top actor.

On the other hand, Chiru was heard to be a major failure and despite his best efforts he could never come anywhere near Sudhakar when it came to mime. Later, it is also heard that Chiru started living few days with Sudhakar in his room to learn the nuances of his acting prowess but could not gather much.

There is also a talk that he used to put heaps of praises on Sudhakar for his intensity and involvement as an actor and had shared many times that he cannot compete against him. Today, everyone knows where Chiru is and where Sudhakar.

Sudhakar is seen on his two wheeler buying watermelons during summer and bananas during winter at the famous KBR Park, as just another face in the crowd.

Revenge of the noob

Circa Fall 2007 : a neatly tucked in and prim creativeshocker walked into the operations management class and with his constant barrage of doubts to the professor and the raising of the hand for every question asked in class made him a star nuisance while the chill pill senior looked on with out a care in the world with a silent smile on his lips.

Fast forward to Fall 2008 : A neatly tucked army of noobs enters the class. They trouble the professor with doubts and fill the class with their loud voices answering every question as yours truly looks disenchanted and happily plays stick cricket and flashes an acceptance smile.

Life. Period.