Nassim Taleb on Euro

"EURO IS DOOMED AS A CONCEPT", declares the author of "The Black Swan", Nassim Taleb, at a recent interview with CNBC. Adding that "We had less debt cumulatively [two years ago], and more people employed. Today, we have more risk in the system, and a smaller tax base. [...] Banks balance sheets are just as bad as they were" two years ago when the crisis began and "the quality of the risks hasn't improved."

Part I: While discussing the outlook for the global economy with Bob Long (CEO, Conversus Capital) on CNBC, Taleb says, "We have no other solution but to slash debt".


Part II: "The balance sheets of banks are just as bad as they were" two years ago when the crisis began and "the quality of the risks hasn't improved," argues Nassim Taleb.

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Infographic: Labour Cost Disparities

DISPARITIES OF LABOR COSTS: Interesting Infographic showing how long does it take other countries to make the equivalent of US minimum wage of USD 15,080.

Click the image to enlarge

Source: FixR

With respect to India, the calculation considers the Government recommended minimum daily wage which is about USD 2.5. In practice, a common worker shall make double to three times of this amount, which is still very less compared to high cost regions but it would make the ratio less skewed. Further, if Purchasing Power Parity (PPP) is considered, the difference between USA and India costs shall be about 6 years and 3 months.

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Goldman Sachs Under Siege (For Doing Good?)

FT point out:
- clueless senators falling over one another to score cheap political points but the sense that outrage against bankers in general, and Goldman in particular, has reached unhealthy levels.
- for millions of home owners and investors psychologically unable to admit at least partial fault for succumbing to the madness of crowds and lure of easy money.
- [an older client on the respect for the firm] 1982 when Puerto Rican nationalists bombed Merrill Lynch’s Manhattan headquarters. “Didn’t they know all the money and brains are at Goldman?”
And, finally,
- some even wonder whether the group’s perceived Jewishness has infected legitimate criticism of it with centuries-old prejudices.

• See also:
• Go here for the FT article.
• Go here for a follow up by TT Ram Mohan in ET.

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"Jugaad" - More Than A Fad?

BusinessWeek RAN A STORY LAST MONTH that focused on "Jugadh" and termed it as the new mantra for innovation. Colleagues and clients not too familiar with the Indian culture tried seeking second opinions on the word. Observers commented on the topic from the world over. Some compared the term with Quality techniques such as Lean and Keizen - doing more, with less. Others saw it as the new Agile. Jugadh or Jugaad was considered by the Economist as the latest cost-cutting technique in Asia. WSJ wrote that Jughad is the primary reason why Indian economy remained insulated in the recent Global economic down-turn. Someone else commented that ISB at Hyderabad conducts special workshops to tool executives with Jugadh, also citing the inclusion of the term in the management consulting arsenal. The original title of the article looked at "Jugadh" as the next big export from India.

After due considerations and with due respect to all the views, "Jugadh" is a fad of a business model on the face of hard-core and global requirements for sustainability. To put is into the right perspective, it is rather unfair to model Jugadh either as a new form of innovation or as a path breaking and business changing technique.

The Hindi word Jugadh or Jugaad (de: जुगाड़) literally means a noun referring to an improvised or jury-rigged solution. Wiki traces the root of the term to the farmers of northern India employing indigenous ways to make use of the domestic small diesel engines for multi-purpose transport and similar make-shift usage. There are indigenous ideas like these which can be categorised as Jugadh, but they are by far a minority. In the broader sense of the practical life, however, Jugadh can be described as what Bear Grylls does on his reality TV show "Man vs. Wild" on the discovery channel: some cleaver survival tactics, a desperate measure but with some spin of intelligence, the basic human instinct of improvisation over the most rudimentary of the tools. That is Jugadh; a poor desperate man's innovation, where: Dependence on luck or accidental favours is too great; Against the rewards the risk is usually too high; And measurability, predictability, controllability and repeatability are too low. And it does not matter who opens a "Jugaad" office in Electronics City, in Bangalore.

I am not sure if Tata Nano is the right example of a Jugadh - it just happens to be one very cheap car from India. Neither it is fully agreeable that people in India are risk-averse - historically, India has one of the most risk taking trading and entrepreneur communities in the world. Likewise, considering Jugadh cleaver without appreciating the risks associated with it is but a mistake. A "Jugaadoo" arrangement - by its very application and circumstance, is only a temporary measure. A hope, if you may, largely thanks to Darwin, of doing better by using inherent human intelligence while the resources are scarce. And then, there are ethical issues when short-cuts and cutting of corners become integral parts of "Jugaad-ovative" solutions.

• See also:
• Related article: Santa's "Jugaad" over Euro tunnel project.
• Related article: Catch Phrases of Consulting.
• Image courtesy: outlookindia.com.

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Malthusian Matters(?)

GOLDMAN SACHS PROJECTS THAT India’s middle class will outstrip China’s by 2045. This is some 15 years after half of China’s population becomes either too old or too young to be part of the workforce.



Perhaps instant-ness of contemporary life induces a certain myopia. Social media - twitter, FB, and other "self trumpets" - may make one feel that 2045 is too far away to be bothered about. And perhaps that's true for some as well, those who would want to die out soon, but 35 years is a fairly short turn around time by economic standards.

Malthusian Matters (pun intended), and stands nonetheless to see another day, another argument.

• See also:
• Go here for more on Malthusian catastrophe.
• Go here for more on this interesting article at Reuters.

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Mushroom Theory Leadership

Mushroom Management Theory: Keep employees in the dark and fearful, feed them manure and dung, watch them grow and when they grow enough, get them canned. (try here for more at urban dictionary)

IN QUITE A CONTRAST TO THE PREVIOUS post on model leadership, this is not only a different type of leadership, it is found being practices widely as well. Referencing their publication for this month (June 2009), John Landry of Harvard Business Review writes that Lehman would not have happened if they would have allowed a freer flow of information, or made it easier for employees to raise their concerns. Industry observers have drawn parallels of Lehman explosion with implosions of Enron and WorldCom citing the same "keeping in dark" issues where information is not shared.

But before that, a brief 'story':

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Depicting Consumption Behaviour in the Recession Era

INTERESTING ILLUSTRATION OF CONSUMPTION BEHAVIOUR in the recession era by Armano on his personal blog Logic + Emotion based on a recent article on the topic in The Economist.



Here is Armano's post, and here is the original write-up at The Economist.

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Language, Commerce, and Google Translate

WILL DURANT CHRONICLED IN HIS HISTORICAL COMPILATIONS THAT ancient trade provided the necessity for the invention of the alphabets. A theory contested by many, but not rejected in its entirety.

In this guest post, my friend and Language Technology researcher Jason M. Adams discusses the mutual history of language and commerce by looking at some of the ways that each has been changed by the other and how they will continue to shape each other going forward.

* * *

Commerce is a human convention deeply entwined with language. Economic motivations were among the many reasons ancient (and modern) empires conquered other lands, spreading their languages beyond their natural range. Traders would travel to distant lands, encountering speakers of exotic languages. Recent study of the immediate commerce and trade (focusing mainly around the era of last 500 years of European Maritime expansion) describes the exchange of languages at trade as follows: In cases where bilingual speakers were few to none, Pidgin languages –with simplified grammar and vocabulary– developed, which come about as a means of communication solely for the purpose of trade. When flourishing trade routes last long enough, and at the hubs trading travelers start settling down locally, a Pidgin starts being spoken widely enough. The children of such a community start growing up learning a Pidgin as a first language. This is when a Pidgin language changes into a Creole language (having many fascinating characteristics of its own). Contrary to simple trade relationships, when a conquering or dominating group of people bring their own languages, it either supplants the native language or influences it heavily, and later goes for linguistic homogenization. Pidgins, on the other hand, develop because speakers are motivated to communicate in order to trade.

[Above: "The Lydian Lion", arguably the oldest surviving coins, representing organized trade and the associated language it bore which gave it its "value".]
Commerce is one of the many factors that drive linguistic homogenization. In the modern era of the internet and mass media, attention is the scarce resource. Choosing a language of commerce (e.g. English being adopted as a language of business by other European and former Russian communities) helps to maximize one's reach in business. On the personal aspect, the attention economy of modern mass media is highly language dependant as well.

On the other hand, the same internet proliferation and mass media has provided us with what is called "Machine translation services", such as Google Translate. As the quality of these services improve, it becomes less and less necessary to publish exclusively in commerce languages. Linguistic homogenization may not be the inexorable force it appears to be today. Will the quality of machine translation improve fast enough, and will the business case for them be strong enough to turn the tide of linguistic homogenization? Certainly those betting on machine translation services hope so. But there is a dueling problem here: Tackling human languages using machines requires a significant investment. However, at the same time, in order for machine translation to truly counteract linguistic homogenization, it has to be freely available as a ridiculously cheap service.

While the future progress of commerce and language may be uncertain, what is certain is that they will continue to heavily influence each other. And there's nothing new about that.

• See also:
• Go here for articles related to the current economic crisis.
• Go here for Jason Adams' blog website.
• Go here for further discussion on "attention is the scarce resource".

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Meltdown Graphics

SOME OF THE INTERESTING GRAPHICS recently found at certain online sources, two of which are real and one is creative.

[Stock prices of three of the UK's largest banks bite dust. The most hit is Fred's RBS, which was eroded close to Zero pence. source: Economist.com]

[Three talk-of-the-doom-town financial phenomena: Long Tail, Tipping Point, and the Black Swan. source: Longtail.com]

[Fall of capitalism and the *new* United States by c.2010 (Or, apparently, Divided States?). source: WSJ.com]

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Britain Officially Slips into Recession

ONLY A COUPLE OF MONTHS AGO, THE (SO CALLED) LEADERSHIP of the stalwarts from the land of the birth of modern finance and capitalism, namely the money streets of London, seem to show the way to the world, yet again. Leading economists from across the Atlantic cried to pay attention to the novel strategy through which the Britons claimed to wager a turnaround of the global financial crisis: by partnering the financial institutes and banks, not just bailing them out.

Today, Reuters shows the data declaring that Britain is officially under recession [See Right. Source: Reuters.com].

Now, there doesn't seem to be a consensus on why this happened in spite of all that happened. Nobody seems to be knowing what's going on, where it came from, taking us where. And apparently, Taleb would be having a laugh. But loosing Sterling suddenly could be much harder than the steady weakening US Dollar - it would probably mean that the hedge would become the target; cover is blown.

When George W. Bush assumed office, he had security crisis falling into his lap almost immediately (9/11) in 2001. The new president in 2009 has the financial crisis to grapple with from day one in the Oval office at the White House. Perhaps the only advantage (if one would want to call it as such) that President Obama might have is the foreknowledge of the crisis he and his country would be entering into. How much that knowledge goes to help him and America, and the world at large, only time would tell.

I would prefer the new President to be wary of this notion of saving the world, for a 'saviour' recently met the following fate. Take a look:


[Above: British Prime Minister Gordon Brown claiming to "Save the world" before the members of British Parliament in early Dec 2008 - roughly a month and a half before Britain slipped into recession. (via telegraph.co.uk).]
There is this old Sufi saying that roughly translates into "Hope anchors the world" (followers of the recent Obama campaign may find familiarity with the word). Almost immediately though, the nemesis definition of the notion is reminded that says,

Optimism is the mania
of saying all is well,
when one is in hell.

• See also:
• Go here for the Reuters data of 23 Jan 09 - Britain slips into recession.
• Go here for the above footage on YouTube.

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The Financial Crisis: Who Let the Dogs Out

THE DEAL.COM HAS THIS USEFUL illustration explaining at a high-level chain of events leading to the current US financial crisis. The editor chose to describe it as chain-of-fools:



[Above: TheDeal.com illustration of chain-of-events leading to the US Financial crisis.]

The TIME MAGAZINE for this week features "Depression 2.0" through the following front-page across all editions worldwide. As the cover-story, economist Niall Ferguson narrates why it may not happen:



[Above: A B&W photo of depression-era Free soup line in the U.S. featuring as the cover page of 13 Oct 2008 issue of the Time mag.]

Update: Embedded this interesting video on the (simplified) explanation on "Crisis of Credit".


The Crisis of Credit Visualized from Jonathan Jarvis.

• See also:
• Related article: Sub-prime Crisis for Dummies.
• Go here for WIRED.COM version of "economic explanations [of the crisis] even we could understand" targeted towards the techie community.
• Go here for the complete story "Chain-of-fools" at TheDeal.com
• Go here for the Time mag current issue (Oct 13, 2008) and a very interesting narration for the common man by economist Niall Ferguson.

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The Financial Crisis: Explanations

HERE IS AN HONEST STATEMENT OF ALL by Kedrosky and so I found an echo in his words below - especially the last line:

I pity [US] taxpayers wandering into the credit crisis story at this point. It is absurdly complex, and centers on a subject that most people neither care about nor understand. And the last time they looked in they were told this was about subprime and housing, which it no longer is -- at least not in large part.

Instead, it is a costly and complex saga involving the unwinding of global credit markets, overlaid with debt syndication, new derivatives, the collapse of the investment banking business, the changing nature of leverage, flawed risk models, structured finance, greed, the housing bacchanalia, savings, paranoia about prior credit crises, and the paradox of thrift. Don't forget, of course, populist political pandering in an election year.

Is it any wonder that most of even the most well-intentioned commentary on the current crisis sounds clueless, unhelpful and mildly dangerous?

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Lehman Bros Files for Bankruptcy Protection

THE 158 YEARS OLD INVESTMENT BANK FROM THE WALL ST. was finally 'allowed' to go bankrupt by the Federal Govt. By one observation time was against Lehman on two accounts - plenty as well as too short: on one hand, time was too short for them to find a suitable buyer and thus save filing for bankruptcy protection; on the other hand, their stakeholders were considered to have sufficient time to make appropriate arrangements and were thus considered fit to fend for themselves (and go bankrupt... Unlike in the case of Bear Stearns which was prevented from going bankrupt by being 'purchased' by JP Morgan and thus its stakeholders were rather spared).

It is not perhaps how large Lehman is and the impact it would generate; the real point to ponder is - is it the first is line? and, who would be next?

Also, is the market at large really ready for a new phase of consolidation? What is with the rumors of BofA and Merrill Lynch merger?

And while there is enough flux in motion, opinions are abound in all streams of media. In an interesting analysis of market reaction to the event through media, following graph shows how data on Wikipedia co-related with Lehman timeline:


[Go here for official Bankruptcy protection announcement.]
[Go here for Paul Kedrosky's 'tracking Lehman'.]

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Five Lessons from Sub-prime Crisis

PHILIP J. PURCELL, FORMER CEO AND CHAIRMAN OF MORGAN STANLEY, proposed the big five lessons for bankers coming out of the current Sub-prime crisis of the US.

For the record, during Mr. Purcell's tenure as CEO at Morgan Stanley for eight years the firm attained following milestones at the close of 2004:

#1 in global equity trading
#1 in global equity underwriting in 2004 for first time since 1982
#1 global IPO market share in 2004
#2 in global debt underwriting in 2004, with steady gains since late '90s
#2 in completed global M&A in 2004

Mr. Purcell resigned from Morgan Stanley in 2005, and has since founded a private equity firm called Continental Investors LLC.

Following are the 'lessons' that he recently discussed through an article in FT:

i) profits matter more than revenues (sales)

ii) compensation should be based on profits, margins and return on equity over time, not current year revenues

iii) leverage works not just on the upside but on the downside as well

iv) diversified and recurring revenue streams not based on trading or principal investing have immense value in a down cycle

v) risk management should become a board-level responsibility, with appropriate committees meeting regularly with management

[Related post: Sub-prime Crisis for Dummies]
[Go here for the Financial Times article where Mr. Purcell explains each in more details.]

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Sub-prime Crisis for Dummies

THE CLOUD OF SUB-PRIME CRISIS JUST GOT HEAVIER, DARKER AND LARGER. The New York Times reported that the Federal Government may assume direct control of the two of the biggest mortgage-finance companies in the US to bail them out: Fannie Mae and Freddie Mac. These two have nearly 45% of mortgage market share between them, and could potentially tank about USD 5 trillion if they go down. On the other hand, the bail-out of this magnitude might blow away credibility of USD, and imperilling the Fed budget.

[Left: Nose-dive - from USD 70 per share last year to USD 9 per share. source: Reuters.com]

There is a sense of politics being involved since the NYT report of "nationalization" came out earlier this week. This further took a large chip off the share prices of both and the decline continued for the whole week in spite of confident building reports from the promoters. Fannie Mae's stock, for one, has lost most of its value, swooning from peaks around $70 in August 2007 to their current $9 per share in July 2008 - a steep nose-dive of net-worth.

This crisis is not "for dummies" for sure. The nature of economy is global with respect to credit/liquidity and oil - the two primary trade elements. Any movement within a given sector or region of these two is propagated all around. It is only a matter of time before the crisis-call reaches the so called developing economies. The globalization is a giant beast of a dinosaur, as it were, so huge that it could have taken about half an hour for a shoe-bite pinch to reach its brain and give out a scream.

Economists have piece by piece deconstructed the "positive" outlook of stability and insulation of the economy that was recently given by the Governor of the Reserve Bank of India. One may argue that the early warning signs are already up: inflation rates have doubled, and the growth rates have halved for H1 of the current fiscal for India.

The numbers that are coming out are overwhelming, and before it really gets too complicated I thought it worthwhile to educate myself, yet again (see links below): to begin with, how the sub-prime crisis came about in the first place.

[Above: For dummies, here is an illustrated slide-show titled "Sub-prime premier": http://www.businesspundit.com.]

[Sub-prime crisis for dummies: Go here for an illustrated slide-show titled "Sub-prime premier".]
[Go here for a Reuters report on "Fannie, Freddie bailout would imperil budget, dollar".]
[Go here the initial NYT report of "takeover" that came out this week.]
edit: [Can India prevent a sub-prime crisis?. Go here for a review in ET of Robert Shiller's recent book: The Sub-Prime Solution (Princeton)]

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Who Pockets the Extra Money I Pay For Gas?

THERE IS NO PLACE CALLED "KING ABDULLAH ECONOMIC CITY" in the world as of now. But perhaps it wouldn't be long before we see a spot on Google Earth with such a name having 3 million in population, partly thanks to the sky-rocketing Oil prices.

Interesting Headlines: "The Crude At Rude Prices"
and
"Oil Crises called Oil Prices"

The crude prices reached a historical record USD 145 per barrel - nearly doubling compared to the previous year. A barrel holds 42 US gallons or about 159 litres of crude oil, making it USD 0.91 for 1 litre - almost double from USD 0.44 per dollar last year. This is the purchasing price of crude oil from the OPEC countries, and is not yet usable. The actual process is much more complicated, but at a very high level, it follows steps like transport it, refine it, process it, transport it again, store it, distribute it and make available at the local gas station. This adds additional costs to the original purchase price of Oil. Traditionally, the total production cost and profit on top with added government taxes becomes the sale price of the product to the end-consumer. However it may not work in that fashion all the time - countries like the US purchase crude at a different (lower) price from the market, and countries like China and Malaysia subsidise the product to bring the retail prices within consumable range for the common people. But then, beyond a point no government with the right economic policies would be able to insulate the global economic pressure of the price-rise. It is rather a misnomer that India subsidises gas and diesel. Consumers in India pay more for litre than the selling price of the Oil companies by the way of additional tax by the government.

[Above: Doubling of crude oil prices over past 366 days. Source: wtrg.com]

This is the good or "light" crude that is getting costlier. The world at large has the capacity to refine this rather crude product into usable Gasoline, Diesel, etc. Increasingly, many oil-wells have started drawing "heavy" crude for which the Oil companies worldwide have limited refining and processing ability. Oil processing giants like Reliance Petrochemicals is in the process of constructing world's largest oil refinery in India with a huge capacity of processing both "light" and "heavy" crude, but it would take a couple of years to be fully functional. The so called shortage of light crude might have put the crude prices under pressure, but by no equation it could make the prices go double over the previous year.

Furthermore, if someone argues that the Demand of Oil has grossly and suddenly outpaced the Supply, and that is forcing the Oil prices to rise, you are being taken for a ride. The demand is supposed to be well in sync with the production. It is the supply-chain that has gone for a toss, and by a certain account a suspicious mind might smell a mischief at work.

I suppose it takes only common sense to pose the question: the extra money that I am rather forced to cough up for every litre at the gas station, where does it go after all? It must be ending up into someone's pocket... There must be somebody who is accumulating a rather handsome capital in this fashion from around the world! And, there are a couple of possibilities:

In a very interesting documentary last month the BBC correspondent visited this once barren site where construction work is going on at a fanatic pace in the deserts of Saudi Arabia. The contractors, such as the Bin Laden Group, are trying to convert the uninhabitable sandy planes into King Abdullah Economic City which is one of the six of its kind - making it one of the largest desert reclamation project in the world.

[Right: The city in Saudi Arabia that consumes a major portion of a billion dollars of revenue every day that the Saudi Arabs acquire by selling oil to the world at a doubled price.]

It is reported that since they have doubled the crude oil prices, nearly USD 1 billion is pumped every day into the building of such cities by the Saudi people; the money that Saudi Arabia, the largest oil producer, acquires by selling crude oil.

[Related post: Oil Money Powering Windmills]
[Go here for the BBC story on the Saudi city and how they make/spend billions a day from rising Oil prices.]
[Go here for details about the controversial oil company Zapata Corporation founded by President George Bush, Sr.]
[Go here for a Bloomberg story on the "world's largest oil refinery".]
[Go here for an interesting article titled: Perhaps 60% of today's Crude Oil Price is Pure Speculation.]

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"The Beautiful Mind" Turns 80

"The special commodity or medium that we call money has a long and interesting history. And since we are so dependent on our use of it and so much controlled and motivated by the wish to have more of it or not to lose what we have we may become irrational in thinking about it and fail to be able to reason about it as if about a technology, such as radio, to be used more or less efficiently..." -- John F. Nash, lecture at CII in Mumbai, Feb 2007

IF THE WORLD IS CONSIDERED A "CLOSED SYSTEM", deeming it a Zero-sum game, Nash Equilibrium could certainly offer a different meaning to the notion of money, and thus, to the word richness or net-worth and the world economy.

[Today, June 13, John F. Nash, Jr. turns 80. A humble tribute to the 1994 Nobel Laureate legend.]

Arguably, the Nash equilibrium is the single game theoretic solution concept that is most frequently applied in economics. In terms of strategy and planning, the equilibrium could be simplified as:

"For any finite, non-cooperative game of two players or more, no player can improve his/her pay-off by unilaterally changing the strategy..."

[Above: Actor Russell Crowe in his Oscar winning portrayal of John Nash in the 2001 Hollywood film A Beautiful Mind.]

• See also:
• Go here for Nash's personal home page at Princeton.
• Go here at Investopedia for the investment perspective of the theory.
• Photo courtesy: Prof. Lynne Butler.

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The Green Wall of China

TODAY, JUNE 5, IS THE WORLD ENVIRONMENT DAY.

It is an open secret that China is the biggest abuser of environment in the world. Most of the manufacturing in China uses coal-burning furnaces, and that one single industry equals more than the most the whole of Europe in terms of CO2 emission.

At the same time, China is the single largest country to have invested the most - USD 8 bn - into planting trees. Criticised yet again though it is doing some serious spend, the reason is rather different from a change-of-heart or accountability or even a soft-corner for environment. Beijing, its capital is being subjected to sand storms so frequently that the Chinese have already coined a term for it - Yellow Dragon. Sand from this area have already started crossing the Pacific and reaching Americas.

[Above: an artist's impression of the Green wall of trees stopping the Gobi desert in its tracks.]

This is the Gobi desert from Mongolia making inroad into China at an alarming pace - claiming 3,600 km² of Chinese grassland per year and converting it into a desert, and creating "sandy" environment all over the place. The denting Chinese economy by nearly USD 50 bn every year. To check this dangerous progress China has finally decided to hug the trees, and we have the (great) Green Wall of China - the largest afforestation project in the world today.

The Green Wall is a project to plant a 4,480 km (2,800 miles) shelterbelt of trees across the North-Western rim of China skirting the Gobi Desert. To avert the ghost of de-forestation, this afforestation project is phased for next 70 years starting 2001.

Better late than never...

[Go here for a related coverage by BBC.]

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My Net-worth is in Millions Already!

WOULD YOU LIKE TO BE AMONG MILLIONAIRES? If you are in IT in India, perhaps you already are!

First, some bullet-points about the global and Indian IT industry that got me thinking:

• Indian Software Industry is approx 66% of Worldwide Software Services
• Top 6 Indian IT Companies makes of approx. 50% of total Indian IT Industry
  
• In terms of sales among these top six (in descending order of reported figures for 2007 - TCS, Wipro, Infosys, Cognizant, Satyam, and HCL), the first three clocks almost 60%

Now, a Forrester Research forecast reports says that the total Global IT spend (IT industry potential) is projected to be at USD 1.55 trillion in 2007-08.

Wow! A quick back of an envelop analysis reveals some pretty interesting monetarily figures. (above: rather front of the envelop; the back was already taken by the groceries' list...) Enjoy:

Global IT industry at USD 1.55 tn (2007)
↓
66% of it is served by companies in India
↓
50% of which is with the top 6 players of India
i.e. 33% of global IT services business is with 6 Indian cos.
↓
About 7% of Global IT business is with Infosys
and
they have about 70k employee-base
↓
therefore, an Individual net-worth could be 7/70,000 = 0.00001%
↓
applying a multiplying factor* p @ p = 3.5
0.00001% x 3.5 = 0.000035%
↓
net-worth of 0.000035% of Global IT business
↓
my net-worth could be 0.000035% of USD 1.55 trillion
=> USD 1.55 tn x 0.00000035 = USD 5425000
=> approx USD 5.5 million

* To account for the disparity of "value-add" across various levels and roles in a given organization and in the industry at large, let me introduce a 'premium' factor p, which takes into account factors such as experience, longevity and loyalty, value-add-over-tradition, client-relationship-quotient, niche skills/domain knowledge, roles/management abilities, innovations/leadership demonstrations, reputation/recommendations/published papers/blogs etc., I-am-the-best-attitude, and alike.

As the base, a 'pure' and productive software engineer in Infosys would have her contributions to the industry measured at p = 1.

For my p factor, I have considered value 1 for 10 years of industry experience, 1 for effectively delivering in client-relationship and value creation (business development) roles, added 1 to it for venturing into and bringing back 'goodies' from unchartered territories (business development, and successful greenfield projects), and 0.5 for doing more than 3 years at Infosys (longevity and loyalty), which makes my p = 3.5.

And, in terms of the Global IT industry, that brings my current 'Professional' net-worth at USD 5.5 million!

Now, that 'Feels' good!

How much is your worth? Aren't you a millionaire yet!

[For relevant Forrester Research forecast for 2007-08, go here.]
[For the corresponding NASCOMM story of 2007, go here.]
[For Forbes.com report on Ambani's 'costliest home in the world', go here.]

Edit:
Go here for npr podcast putting "Value On Life" at USD 6.9 million in 2008, which is a depreciation of nearly 11% over past five years.

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"Fred the Shred" under the weather?

THEY CALL HIM "FRED THE SHRED...". If you count "few good men" who took the lead in the "rationalisation" of workforce in the conservative European banking and Financial services, Fred has to be in the front row.

Sir Frederick Anderson Goodwin, remained in the news in Europe, mainly Britain, for his often visionary yet unorthodox methods of running Britain's second largest Banking group. After he assumed control, the RBS groups, perhaps for the first time, saw a rather American-styled cost-cutting, or Shredding as the Britons prefer to call it.

Managing nearly 1000 people worldwide at the age of 32, the acumen more than the aggression made Fred the CEO of the Clydesdale Bank at the age of 36. He has been quoted as famously saying, "I have no time for cynics, spectators or dead wood". And as we speak, being with the RBS group, he is the longest serving CEO in the FTSE-100 index. (That precisely makes me wonder if the pool underneath is in a pull-down mode...)

Knighted at the age of 46 for his services in Banking in 2004, the RBS group saw its highest ever rapid inorganic growth since Fred was brought in by another Scot and the then Chairman of RBS Group, Sir George Mathewson. Whilst being at a couple of bids of hostile acquisitions, he has been quoted saying, "There may be some possible mercy killings".

Chosen as the "Businessman of the Year - 2002" by Forbes, Fred began with the humongous acquisition of NatWest in 2000 with unusual amount of due diligence of nearly 500 man-days, and the latest is acquiring of ABN AMRO for about Euro 70bn by the consortium let by RBS Group. All in all, in last nine years that Fred has been with the BRS group, their 'shopping list' lists 26 buy-outs at the value of GBP 33bn (about USD 66bn).

[Above: (L-to-R) Maurice Lippens, Executive Chairman of Fortis, Jean-Paul Votron, CEO of Fortis, Fred Goodwin, CEO of Royal Bank of Scotland (RBS), and Emilio Botin, Chairman of Spanish banking group Santander Central Hispano (SCH) in Edinburgh, Scotland, 10 August 2007, at the time of acquisition of ABN AMRO by the BRS-led consortium.]

"I have no time for cynics, spectators or dead wood..."

It is that time in the turning wheels of world economy that the Citigroup reports a loss of USD 5.1 bn, and the chairman of UBS already fallen on his own sward, Fred is equally under fire for (yet undisclosed) rights issue coming from RBS for nearly GBP 9bn.

It is perfectly all right, I suppose, that there are other, younger, aspiring 'leaders' waiting in the wings to take command, the aegis of Fred and the likes has to be honoured nonetheless; for what it is - the aegis; though you may also count those rather "dodgy deals" that Fred supported for the sake of "business" at "huge" environmental costs in the Oil & Gas sector... (See also: The Green wall of China)

Update: Fred took an early retirement in October 2008, following the financial disaster, largely through AMRO deal. Later RBS reported a loss of GBP 24bn, and was subsequently Nationalised by the UK government. In Feb 2009, taxpayer ownership of RBS was between 75% to 95%.

• See also:
• Related post: Meltdown in Graphics
• Go here for a related story at independent.co.uk: Rise and falls of 'Fred the Shred'
• Related post: Ken Harvey - The "Richest" CIO

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