Archive for September, 2008|Monthly archive page

Getting fired and the US financial crisis!

Last week, one of my colleague got fired. He got fired due to non-performance rather than the huge financial turmoil that has been happening lately in the US. He was a very good friend of mine and we spent a lot of time talking about soccer (he was from Europe) and in general were on very good terms professionally too. He came down early in the morning, like he usually does but was promptly walked out of the door by his manager. It was a shock to him, as it was for everyone else, including me. This was the first time I saw anyone getting fired, and it shook me for that day. I called up one of my good friends and my conversation went on the lines of ‘I might not see him ever again, he is as good as, if not exactly, dead to me’ – not exactly sentimental or sympathetic but close to it but that was that. Life continued on the same enthusiastic tone from next day onwards.

Over the last week, however, hundreds have been fired. Over the next 6 months or so, many more will be. Lehmann, AIG, Washington Mutual, Wachovia – its almost like the who’s who of US financial services. Quite a few of my friends work in many of these companies and many of them and their colleagues have got fired. Other than the usual friend bonding-sympathy, I felt no particular remorse that these giants were going down nor that people in these companies were getting fired. Was it the feeling that these companies deserved to be punished that made me feel non-remorseful/not shocking? Maybe so. But there was another reason.

I believe in Capitalism (more libertarian than capitalist, but for simplicity purposes, let’s stick to capitalism). Whether I like the Darwinian capitalism of the West, state-sponsored capitalism of Europe or the neo-Confucian capitalism of the East is anybody’s guess. Capitalism drives efficiency, promotes markets, promotes level-playing field and in general, is an accepted form of generating value for a long time, for the greatest number of people.

I think that’s the precise reason why the United States is the hotbed of capitalism, entrepreneurship, innovation and in general, the destination market for almost every company in the world. Resources get allocated to the highest bidder or the brightest idea. Money is not a consideration as long as your idea can work, or you have the right skill sets. Markets (and by extension, Wisdom of the Crowds) determine whether you/your idea are successful or not. Markets determine your profits and in an ideal, capitalistic society, Markets should indeed determine your losses.

The last point precisely pissed me off during the last week. Failure of the basic tenet of capitalism. All the who’s who of US financial service companies made truckloads of money over the past few years, over seemingly intricate financial products, only understood by a few. These companies were champions of the market, proclaiming how good the Wisdom of the Crowds was. However, when it was time to recoup the losses, they criticized the market for short-selling (which simply means that the market has lost confidence in these companies and hence will eventually lead to a downturn in their share prices) and shamelessly begged the Government to bail them out. And, the stupid Government did.

Communism is another concept, wherein the resources are taken from the rich and are given to the poor, thereby creating a sense of equality. What has happened in the US over the last week, is Reverse Communism – taking from the poor (in the form of taxes which inevitably have to be raised over the next few years, in the form of less development due to resources deployed to bail these companies out, increased cost of borrowing due to a screwed up financial economy etc etc). Heard of double standards? Capitalism on the way up and Reverse Communism on the way down – thereby making hay whether the sun shines or not. Well, I would love to be on such a party, if I was not paying for it. But, the tragic part is, that I will – atleast in the form of increased taxes. When the shit hit the fan in Wallstreet, all the walls in US homes got colored.

It is not the huge profits that these companies raked that pissed me off, it is not that the Government has bailed them out that has pissed me off, but the very concept of privatizing wealth and socializing debt is what that has made me angry, frustrated and when I hear such things as AIG getting sold at $1.5 a share and Lehmann close to zero, I experience immense schadenfreude – and if that makes me a sadist – so I am.

P.S – On my other blog Framework for Increased Profits – An Understanding


Labour Day – Whitewater Rafting at Poconos!

31-August-2008, Pennsylvania, Poconos, Leigh River, Whitewater Rafting, 12 miles, 7 hours, 4 people -> Exhilirating Fun!!

It was the Labour day weekend in the US, and what better way to spend it, than in one of the best sporting adventures ever created – Whitewater Rafting.

Rafting or whitewater rafting is a challenging recreational activity utilizing a raft to navigate a river or other bodies of water. This is usually done on whitewater or different degrees of rough water, in order to thrill and excite the raft passengers.

There are many places to raft in the US but one of the best places for rafting in this country seemingly is the Whitewater rafting in the Poconos. The Poconos is a mountain located in Pennsylvania (a 2hr drive off New Jersey). Many adventurers come to this place every year to raft in the whitewaters. In fact it is rated as the best place for rafting by the world’s best rafters, The waters here provide several thrills and spills and ergo, exciting adventure.

Although there are several agencies for rafting in Poconos, we went to the Whitewater challengers who had high ratings from the US government – and we came away mightily impressed. They were very organized – from inward parking to dropping us off – just perfect. Very professional and extremely committed. I would recommend them to anyone who would want to go rafting.

The actual rafting experience was simply awesome. The experience in whitewater rafting is totally unique every ride one makes because the water rapids are different each time. Our rafting was through the Lehigh River Gorge which has class I II and III rapids. The Poconos mountains in all its pristine glory overlooked the Leigh River gorge. The trip was about 7 hours (12 miles, approx 19km) on the river, a little overview of safety and what to expect, about a 20 minute school bus ride to the trail to walk down to the river and about a half mile to a mile hike down to the river. After about an hour of setup, intro and travel time we hopped in a raft and shoved of down the gorge. There were four people in the raft (three of my friends and myself), a bail bucket, a lunch bucket and of course we all had paddles and life jackets. This particular weekend was a dam release weekend which means they let a ton of water out of some dam upstream somewhere and there is enough water in the gorge to create some rapids and go rafting.

Our group on the raft was very interesting. Since this did not involve any Class IV rapids, there was no professional guiding us on the raft. Therefore, we four of us had to figure out the navigation of the raft for the entire 12 mile trip – and that is where the problem began. You understand ‘mutiny’ – this was even worse. Whosoever took the responsibility of guiding the direction of the raft came under a lot of flak, and nobody on the raft listened to him. Make no mistake, each of us took turns to ‘guide’ the rest in the right way, but to no avail. There was never a common understanding inspite of loud urges of ‘left, left, left’, ‘right, right, right’ and ‘All, All’ – people in the raft did what they pleased and what they thought to be the right way to guide the raft. Getting stuck on rocks, spinning through the initial rapids and in general, attracting attention due to our loud shouts – it was one helluva ride for 12 miles – interspersed by few periods of silence and brilliant rafting. It was fantastic fun at the end of the day when we finally reached the destination and people on the raft (including thyself) were taking credit for guiding the raft in the right manner – an illusion no one would be able to erase for a long time to come. The only casualty on the entire 12 mile trip was P dropping his raft into the river after we hit a rock at a wrong angle and with a bad velocity, about 4 miles from the end point. We however traversed through some difficult rapids among rocks and some swirling rapids inspite of the casualty very efficiently before reaching our destination. We were extremely lucky not to have run into injuries along our entire trip inspite of our ‘skilled’ rafting.

But, nobody gets it right the first time. We practise, we learn – and next time any of us are on any raft, I am sure this rafting experience would come in very handy. 7 hours in the blazing sun on a tricky river, paddling and shouting, was enough to pulp our muscles for the next two days. For anyone looking for an adventurous trip, I would definitely recommend Whitewater rafting – it is an experience which words cannot describe and an occurrence one would never forget.

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