The global financial crisis explained.

'Global Credit Crunch', 'Global Economic Turmoil', 'Global Meltdown' are some of the most widely used terms now-a-days to reflect the current economic situation worldwide. So how did this crisis evolve? Who is responsible for this mess? Why has it effected the entire world and finally Who is going to ultimately pay for this? are some of the questions that I am hoping to answer in this post.

Before getting there, let me explain how any 'traditional' bank in India works. Banks like companies strive towards earning profit. Home loans sector is one of key contributors to its profits. An aspiring home owner goes to a bank for a home loan. The bank verifies his credit history and on being satisfied that the customer would be able to repay the loan, issues the home loan. The borrower(home owner) starts paying monthly interest on the principal he owes to the bank. To ensure that the borrower pays interest on a regular basis, the banks take the house as mortgage i.e., if the borrower is unable to pay the interest on a regular basis, the bank has the right to auction the house and retrieve the principal. In India, this is where the story stops. However in countries like the USA, the banks go a step further and sell all these mortgages to third party institutions such as the now infamous Lehman Brothers. There third party institutions, then convert these mortgages into financial products and sell them to investors on the Wall Street. This process is called securitization. Thus, a link is established between home loan and the Wall Street. Now what happens if a lot of home owners default on their home loans? This is precisely what happened in the USA. The banks lent money to a lot of people whose credit history was not good at higher interest rates(aka sub-prime lending). They banked on the rising real estate prices to secure their loans via mortgage. But when a lot of customers began defaulting, the bubble burst. Real estate prices plummeted and everyone from banks to the financial markets got effected.

The banks ran out of the cash as they were unable to retrieve their loans, either from the customer or from auctioning the mortgages(houses). There was a liquidity crunch. Banks also stopped lending to other banks over fears that the other banks might fail. So, a vicious cycle started. Now, we should remind ourselves that availability of credit is the key for the growth of any economy. For example, entrepreneurs need credit to start/run companies. When there is a credit crunch, the whole economy is effected and if that economy is US, then the whole world is effected as most countries rely on exports to the US. For example, the software, BPO service sectors in India are heavily dependent on the US for their survival or profits. If these are effected then the jobs of many young Indians are effected. As Indians begin to spend less and less owing to such fears, the Indian economy is effected. So is the case with China which exports most of the manufactured goods to US and EU.

Why did banks resort to sub-prime lending? As explained, one of the reasons was that they assumed that even if some customers default on the loans, they will be able to retrieve the principal by selling their mortgages. This assumption was fine as long as the real estate market was up. But as the market slowed down, it started hurting the balance sheets of the bank. One should also blame the Fed for not installing proper regulatory measures to arrest this whole process. All in all, it was a collective miscalculation on the part of banks, investment banks (those third party ones) and the US Fed (regulatory authority) that led to this crisis which is threatening the world in many ways.

So, what is the way out? Last month, most of the governments in Europe and the US have decided to directly pump money into the banks to ease the crunch. Will it work? Only time will tell because at present, there is a complete lack of confidence in the financial world. No one is sure if the money they lend is ever going to come back to them, let alone the profits. Even if the governments provide them cash, they may not be ready to lend. This crisis is also a crisis of confidence. In my opinion, it will take at least 18 months to gain back the confidence and for everything to fall in place. Until then, the markets will be volatile and people will spend nights in fear of losing their jobs and dreams.

Co-existence of agriculture and industry

Events taking place in Singur (West Bengal) have been dominating the news in Indian media for the past couple of months. To recap, West Bengal government acquired farm land totaling 997 acres from the local population and handed it over to the Tatas to setup an automobile industry. The Tatas hope to produce the world's cheapest car 'Tata Nano' from this plant. If and when they do so, it will be a proud moment for every Indian and it could very well transform India into a major low-cost automobile producing destination. That would eventually mean a complete transformation of the livelihood of people living in and around Singur. However, all these dreams are about to be gutted due to the agitation of the Trinamul Congress supremo Mamata Banerjee. She claims that most of the land (about 300 acres) has been acquired without the assent of their owners. She demands a return of this land. The WB govt cannot return this land without effecting the project. The Tatas need most of the 997 acres to setup the mother plant with all the ancillary plants coming around its vicinity. So, if the WB govt chooses to return these 300 acres, the Tatas would very well leave the state and setup the plant elsewhere.

All this brings to central question of whether industry and agriculture can co-exist without impinging on each other. In my opinion, it is not a question of one losing over the other. Both can and should co-exist for the prosperous future of our nation. All it needs is a central policy that lays down the approach each state govt should follow in allocating or acquiring farm land for industrial purposes. Each state government should develop a land use plan earmarking land for various purposes such as industry, agriculture, communications and service sectors. The Land acquisition act should be suitably amended to ensure fair compensation to all those farmers losing their land. The farmers must be engaged through the entire process of acquisition. Referendums such as the one held in Raigad Maharashtra could be held to guage the mood of effected farmers. Once the farmers accept the acquisition, they should be involved in the process that decides the compensation. And finally, the local population should be provided a stake in the industry through jobs or as shareholders in the company.

Industry will ensure non farm income for the rural population. Mass suicides could be averted if the farmers could be provided assured income and work security. When they lose a crop due to flooding and so on, they could resort to non farm labor in the local industry. China provides an excellent example as to how an all round human development is possible when work and income is assured. In the 1980's China launched a two-pronged strategy to improve the lives of their rural population. First, steps were taken to improve the yield of their crops by setting up good irrigation infrastructure and using latest technologies. Today, the average yield of Chinese farms is twice that of Indian farms. Second, Township and Village Enterprise(TVE) movement was launched to shift a 100 million farmers to non farm employment sector. This transformed China into the factory of the world. This strategy completely transformed the lives of their rural population. As a proof, the child malnutrition rates of China dropped to an impressive 7% while that of India is currently 46%.

Thus Industry and Agriculture should prosper together if we are to see a developed and hunger free India. We should not destroy the future of the young rural population by denying the fruits of rural industrialization. They will not forgive us if events such as in Singur take place on a regular basis. Diversification of rural employment is the key. It should be spread across all the sectors - primary, seconday and tertiary. Only then can we ensure quality life to the rural population.

Does India need a Jon Stewart?

Jon Stewart, the quintessential American political satirist, is known for criticizing any flawed government policies with mind blowing humor. His impromptu show, 'The Daily Show with John Stewart' which features on most weekdays on American Television has a strong base in the young American population vexed with their Government's all round failure. The young vent their frustration by tuning into his show night after night. Over time, he has become so influential that major politicians like Obama and Hillary have featured on his show. Some say that he had a role to play in Hillary's victory in at least one of the states (She featured on his show via satellite the night before that primary) during the Democrat primaries. His ease in dissecting the daily news and presenting it to the audience in a humorous way is outstanding. Regular performers on his show like Stephen Colbert have made it big once they left the show. I cannot but compare the frustration amongst the young Indians with those in America. Both are disillusioned by their scandalous politicians, more so in India. Do the young in India need a John Stewart who can criticize the the daily ongoings(bad ones) in the Government with no fear? I certainly think so. Somebody like him could easily galvanize the youth and generate awareness among them about all that is bad in the current Indian Politics. The youth of today has been criticized for not showing interest in Politics but we need to understand that most of them need an entertainment medium to dissipate information regarding politics. Nobody seems to have the time to listen to serious news (no...not the ones on Aaj Tak), let alone read a newspaper.

Assuming that we find one in the near future, will the Indian society give him the 007 license for criticism. Will the national parties be mature enough to take the criticism in their stride? Or, will they unleash their goondas for allegedly "hurting" their "sentiments"? Only time will tell but we need a Jon Stewart in the immediate future to save the country's youth from getting totally ignorant of what's happening around them.

Bryan Adams - 11

American Idol for sure!!!

I do not know if he will win this year's competition but to me he is the next American Idol. Period.

Change of heart!

I am tracking David Archuleta, Danny Noriega and Alaina Whitaker this year and I strongly believe one of them is going to make it. Which one? My heart says David Archuleta for now. He is too talented for a 16 year old. The only threat I see is, can he hang in there when the going gets tough in the following weeks?

American Idol 2008???

Very impressive and he is my fav so far this year

Bryan at Sacramento.

Bryan is releasing his new album titled '11' this March. Excited about that. What's even more exciting is that one of the singles from that album will be played around the world this Jan 28 on radio. I wish he releases the song to iTunes.

It goes 'I thought I'd seen everything'. There is a chance that he might sing this at his concert next month in Sacramento. I have plans to attend that. Let's see how it goes.

Bryan chante en français!!!

I knew Bryan was Canadian born to English parents but I never knew he sang a few in french. This is the first I've heard and the lyrics are 'superbe'!!!



Je suis là, me voilà
jamais je ne pourrais vivra sans toi,
me voilà, à tes cotés
ce soir j'ai le droit de rever.

un nouveau monde, une nouvelle vie,
nos deux coeurs battent au rythme de la prairie,
un nouveau jour, une nouvelle joie,
je n'attendais que toi, me voilà

Nous voilà, et tout commence,
j'attend depuis longtemps ce jour de chance,
oui! nous voilà, toujours ensemble,
ici sur la terre qui nous ressemble...oh...


ohhh... me voilà

oh me voilà, oh me voilà
à tes cotés, oh me voilà
et tout à coup, le monde est transformé
Me voilà ohhh, me voilà
je resterai, rien ne pourra
m'empecher , oh me voilà

je suis là

5 things "tough" being a Telugu boy

There are a million reasons to be a person belonging to the telugu community. However I feel that this community has designed a few stereotypes over the years and expects everyone to belong to one of those ASAP. Here are a few occassions when your relatives/parents try to make your life a living hell.

1. You are 21 and you do not have plans to go to a foreign country esp. USA.
2. You are 23 and you are not earning as well as some Tom, Dick and Harry that they know. Be assured that they will always know someone who earns more than you.
3. You are 24 and you aren't married yet.(Especially in my Reddy community)
4. You are 28 and you do not have kids yet.
5. You are 30 and you do not own a house and a car.

The list can go on but I need to be more than 30 years old to figure out the latter part of the list. Just an observation that I wanted to point out.

Oracle Fusion Gets a New Boss.

It's out in the public and hence I am posting this article from msn. Oh BTW, Thomas Kurian was born and raised in India.

Oracle's (ORCL) fastest-rising executive has just stepped into a job that could determine how successful the world's second-biggest software company will be during the next decade.

Thomas Kurian, described by turns as thoughtful, charismatic, eloquent, and ambitious, took the helm of Oracle's Fusion project on Oct. 15 amid growing worries that the pivotal, complicated initiative may underwhelm customers and investors when it arrives in late 2008. The aptly named project is a grand plan to stitch together the wide array of business software products Oracle has acquired in the course of a three-year, 35-company takeover binge costing $24 billion.

Kurian, previously the chief of Oracle's fast-growing middleware application business, has big shoes to fill. He's taking over for John Wookey, a well-regarded veteran beloved by developers and customers, who has been reassigned within the company. "There are lots of stars inside Oracle, but they put multiple stars next to [Kurian's] name," says Brent Thill, director of software research at Citigroup (C).

Will Fusion Deliver?

For customers and investors, a lot riding is on Fusion's success. So they'll be listening closely for rare public clues about the potential financial and technological impact when Kurian gives a speech on Nov. 13 at the Oracle OpenWorld conference in San Francisco.

The new suite of applications -- used for functions such as managing a company's books, keeping track of customers, managing payrolls, and planning manufacturing schedules -- is supposed to cherry-pick the best of Oracle's software collection. That includes applications from Oracle's homegrown line, as well as from PeopleSoft, J.D. Edwards, Siebel Systems, and smaller acquisitions such as Retek and i-Flex Solutions. The first version will likely include what Oracle considers its biggest guns -- its own accounting software, PeopleSoft's human resources product, and Siebel's customer management application -- melded together with a unified approach to storing data and interacting with the programs.

Many Oracle customers and Wall Street analysts are skeptical that Fusion can deliver what the company has promised. Corporate IT departments have been left in the dark about what to expect since Oracle has eschewed the usual practice of testing a major product upgrade with select customers at least a year or two before it's released. "No one knows because no one's seen anything," says Charles Di Bona, a senior equity analyst at Sanford C. Bernstein & Co. And some chief information officers still have a hangover from a buggy version of Oracle applications released in 2000.

For now, Oracle's customers are stuck with a passel of aging products for which they pay hefty annual technical-support fees, and which aren't particularly easy to combine with one another or the latest Web technologies. The first Fusion version of Oracle's applications will attempt to solve those problems using the Java programming language and "Web services," an industry term for a set of Internet communications protocols. If successful, Fusion will lower customers' IT costs, yet keep them doling out lucrative support and maintenance fees to Oracle for years to come.

Diamond or Dud

Oracle is already tops in database software. But with all the acquisitions, culminating in Fusion, it wants to unseat archrival SAP (SAP) for control of the applications market. SAP controlled 20.8% of the $56.4 billion market for enterprise applications in 2006, nearly double Oracle's 10.7% share, according to industry consultancy AMR Research.

If Oracle gets Fusion right, delivering cutting-edge technologies that make it cheaper for customers to build on its platform, the company may add to its applications market share. It would also help extend Oracle's reach into new markets such as retailing and transportation. And with one underlying software code to support instead of the current five, the company could make better use of, or cut, its $2.2 billion in annual research and development spending.

If Fusion's a dud, Oracle risks losing ground to SAP and Salesforce.com (CRM), both of which have been quicker to deliver Web-based versions of enterprise software. The Web-based approach has grown in popularity because customers can lower the cost of keeping software up-to-date.

Worse, Oracle could lose customers to rival offerings from SAP, Microsoft (MSFT), and other competitors, a risk software companies face when they overhaul the code underlying their products. "In any technology architecture shift there are winners and losers, and you clearly want to be on the right side of that," says Peter Kuper, a vice-president and research analyst at Morgan Stanley (MS).

Unclear Road Map

It may take years and multiple generations of Fusion before the outcome is known. Murray Beach, president of investment bank Boston Corporate Finance, says he expects Oracle will have a strong offering in several years, by perhaps its fourth version of the software. "You're not going to see the best product the first time around," he says. Recent analyst speculation about a potential Fusion delay has died down, but some think Oracle simply readjusted its target. "Oracle will ship something in 2008 and declare victory that they got it out the door," says Citigroup's Thill.

At Oracle's annual shareholder meeting on Nov. 2, CEO Larry Ellison said some Fusion products will appear in 2008, and more in 2009. Customers will move to them "over a very long period of time," he said. Oracle declined to comment for this story.

But IT executives say Oracle's Fusion road map -- the multiyear plans tech vendors publish to show customers what to expect and when -- has been fuzzy at best. "Other than a lot of hype and hot air about Fusion, how is it really going to work?" asks Allen Emerick, IT director at Skanska USA Building (SKAB), a construction firm involved in projects such as the new NFL stadium at New Jersey's Meadowlands sports complex. "The timing has been all over the place." Skanska runs applications from J.D. Edwards, which Oracle picked up when it bought PeopleSoft. It remains unclear, Emerick says, how Oracle will get that software and its customized elements working with Fusion products.

The Uncertainty of Transition

Further complicating matters is the chance that Oracle could make another bid for middleware vendor BEA Systems (BEAS) [BusinessWeek.com, 10/30/07], adding another alien product line that would need to be integrated into Fusion at some point.

SAP is trying to exploit the uncertainty, telling customers that Fusion's goal of tying together Oracle's various applications could be a red herring to get them to stay on board. "Maybe they were being a little naive" in thinking they could pull off the integration, and "maybe they were being a little marketing-oriented" in selling the Fusion concept to customers, says Bill McDermott, SAP's president and CEO for the Americas, Asia Pacific, and Japan. In September, SAP introduced an Internet suite of software [BusinessWeek.com, 9/19/07] for small and midsize companies called Business ByDesign.

Oracle could quiet its critics with a strong early version of Fusion, or at least erode their arguments over time. Either way, the company has played its hand deftly while it makes the transition. First off, nearly all Oracle customers have been signed up for multiyear licensing agreements that will hold regardless of whether they choose to upgrade to Fusion. The company also has held onto customers of PeopleSoft, Siebel, and other acquired vendors by offering them lifetime tech support.

Kurian's Ascension

The aftermath of the power struggle between Kurian and Wookey could go a long way toward streamlining Fusion. Kurian's middleware group and Wookey's applications team were working on overlapping Fusion projects, and the two were fighting over pieces of Hyperion Solutions, the data-analysis software vendor Oracle bought in March, analysts say. In addition, Kurian was being recruited by other tech companies and needed a promotion to stay on board, according to sources.

To be sure, marginalizing Wookey, who had a reputation for holding onto key developers and fixing projects that went off track, could set Oracle back. "He was a tremendous asset," says Citigroup's Thill. "He's not someone who's easily replaceable." Wookey is staying on at Oracle to assist with the reorganization, according to an Oct. 15 e-mail Ellison sent to employees. Messages left at Wookey's office weren't returned.

A couple of years ago, Oracle president Charles Phillips introduced Kurian at a customer event in Boston as Oracle's potential next CEO. There's a long list of former highfliers and potential successors who are long since gone from the company, though, including venture capitalist Raymond Lane, former PeopleSoft CEO Craig Conway, and onetime heir-apparent Gary Bloom.

People who know Kurian say he's got the smarts and savvy to get even further ahead in Oracle's rough and tumble world. Shipping a winning version of Fusion would go a long way toward proving them right.

Copyright © 2007 The McGraw-Hill Companies Inc. All rights reserved.


Disclaimer: All the opinions expressed here are solely mine and do not necessarily reflect those of Oracle Corporation.

Nice guys do finish last!!!

The last week had thrown up a couple of shocking things. One in my work circle and the other in Indian Cricket. Both the incidents involve men who are right up there in my gentlemen list being stripped of their service. The first person is none other than Mr JW himself (Unfortunate that I can't list his complete name but you can get a hint as to who he is by going through some of my previous blogs). He had been one person whom an entire developer community could easily relate to and look up to. A mild-mannered executive who didn't tolerate crap from anyone but was always people oriented. I never imagined that this could happen to him but as they say, some things do happen for a reason. I feel uneasy writing the above few lines without being able to express freely. A blog is meant to be a tool for free expression, yet in this world you have to be careful at times as to what you write.

Moving on, the second incident relates to dropping Rahul Dravid for the final one-dayer at Mumbai. I thought that it was completely unfair and Rahul had been made a scapegoat for India's failure in this series. There were instances when a couple of players never managed to score prolificly for a couple of years but had opportunites showered on them. Yes, I am talking about people like Sehwag. Is this regionalism, marginalisation?? I do not know but I for one believe that there is a force in this cricket administration acting against him and I wouldn't be too surprised if Rahul chooses to quit one day cricket soon.

It was indeed a lot to digest but I guess one has to move on. After all, we've got to realise that life is unfair and get used to it.

Disclaimer: All the views expressed here are solely mine and do not necessarily reflect those of Oracle Corporation.

Will miss ya JW

The entire army of developers will miss your leadership. I personally loved the time when you were at the helm. Good luck for your future.

Okay...I do not hate Enrique's musique anymore

Wow!!I never thought I would say this. I do not hate Enrique Iglesias music anymore. These days I am in rythm with his kinda musique. I think Insomniac is his best album so far though many tend to differ. Is it me changing or he improving? Donno but not bad to have another music outlet to resort to.

Indians are Cowards.

A few years ago, I read an article by Francois Gautier (sorry for not using the cedille) that was titled 'Are Hindus cowards?'. I didn't give much thought to the article at that time but every time a bomb blows up killing hundreds of Indians, the article comes straight back to my mind. Of late, there had been so many blasts that I kinda believe in it now. Yes, we are cowards and have been for many centuries now. We've let almost every other race on this planet invade us. Yesterday's bombings have changed me for ever. I do not want to mention what I believe in at this moment as it is controversial but as I end this post I feel that ' We will patiently for another bombing in future, after all we are more than a billion ....life is cheap'.

Music can heal.

This sort of phrase would have drawn a funny response ('Chandler'esque if I may put it) from me a couple of years ago. But no more. I am a firm believer in this phrase at this point in my life. I agree with most of my friends and colleagues when they tell me that I am running 5 years late in my life. I tend to go through stuff that a normal person of my age would have gone through 5 years ago. When I was in college, all I was interested in were Cartoons, F1, Cricket and any damn series on Star World or Zee English as opposed to my friends who had real problems I guess. Looking back, I think I did a damn good job in keeping my mind pre-occupied. Now that I am no longer interested in these and faced with reality, I find myself down a lot these days. Given a choice I would love to go back in time and erase certain things that happenned in my life but that would need divine intervention. The only thing that keeps me lively these days is Music(I hope my boss doesn't read this). If it was Taylor Hicks last year, it is Keith Urban these days. Donno why but I take a huge liking to their songs. Their lyrics touch me like no other. I want to be like how I was a couple of years ago. No worries, all fun and having a point of view on everything damn thing on this planet. It will take time but I will be back.

11g has left the labs

Couldn't resist posting it.

Check out John Wookey hinting at one of the key capabilities of Fusion apps. Zero downtime patching. Beat that SAP!

Disclaimer: All the opinions expreseed here are solely mine and do not necessarily reflect those of Oracle Corporation.

Putting my Apple Inc hat on.

I recently read a post on the fake steve blog that caught my imagination. It explains how things work at Apple. The engineering is in the reverse direction. First the product looks are conceived and then technology is driven to achieve that. I think it is a lot different from how other companies work. Yes, the product to be created is decided at first but along the way, it undergoes changes say because there is no easier way to do it. Eventually the product is compromised and what you get is not what you wanted at the first place. Most people seem to happy at the end that at least they are able to turn around the product.

I have seen this myself in my day to day work. Technology tends to drive my decisions rather than the other way around. For once, I decided to change it, be it for a small application. My first challenge was to come up with an interface that was very intuitive. Once I came up with it, I put that on a piece of paper and would look at it each time I faced a road block in implementing it. It wasn't easy. My mind was ready for a compromise every other day but I just stuck with it. Eventually, I was able to implement it without any compromise whatsoever and I am very proud of it. Not sure if this would still get an approval from my product team but hey I have learnt a very valuable lesson.

Pratibha who?

Come 19 July and Pratibha Patil will most probably be the next president of India. Last week, when her name was pushed into the fray, I had no clue who she was. I thought that she was the wife of Congress' initial nominee Shivraj Patil. I am confident that it is the same with most of the young Indians. I had to actually google to find out who she was and wikipedia presents her as a 'Post-Emergency Indira loyalist'. Well, that should explain it, typical Congress politics. Drill down further and you can find a list of her credentials, credentials that would hardly make my hair on the back stand up. Given that she will be the successor to one of the most famous presidents that India ever had, I am ashamed that the UPA would stoop to such low levels in nominating a President that could best be described as a rubber stamp President.



I am not saying this because she doesn't look glamorous or westernised. It's just that there is nothing special about her. One can find 100's of women like her. If loyalty to the Gandhi family is the criteria for every major post in this country then it is time we kicked the Congress party out of power.

'Makes me wonder' why I love this song?

It's been three days and I must have heard this song at least 200 times, now that is 700 mins or 12hrs we are talking about. Really makes me wonder why the fuck I love this song? I wonder why?

Maroon 5 - Makes me wonder