WALL STREET 2

Highlights - Couple of 'punch' dialogues from Gordon Gekko , Susan Sarandon ( old but still beautiful) .
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Wall Street was a cult movie and Gordon Geko was any traders God. In the movie , when Gekko says ' I once said Greed is good.... but now it seems its legal' i expected a fantastic movie to follow - something that would capture the recent turmoil in the financial markets and exaggerate all the wrongdoing - Gekko ishtyle. Perhaps Rajnis Endhiran spiked my senses into expecting a lot of overdramatization and exaggeration. The movie unfortunately falls flat - its not walls street its more of a love storey with Gekko and the street as a back drop.


A big disappointment though not total.

The movie jogged memories of my days with Lehman and the 2007 crash. It started with JP buying Bear Sterns for $2 a share , followed by the collapse of Lehman - then the bailout of banks , tarp and what not. Oh and how could I forget all those rumours of naked short selling and the alleged accusation of Merrill and Goldman conspiring to take their revenge on DIck Fuld and Lehman. Consequently a lot of us lost our jobs , a lot others lost a lot a fortune and lives changed. Wall Street 2 captures some of these moods and plentiful rumours. I am sure , that most of us who had to live through the 08-09 crash would reminiscent those days after watching this movie. I sure am glad that i survived those bitter cold days. They still send a shiver down my spine once in a while - but I sure am glad I made it through

SCIENCEs FIRST MISTAKE

Science’s First Mistake and Religion
by Ian Angell, London School of Economics

The 2009 Christmas season in London had Richard Dawkins teaming up with Ricky Gervais, Dara O’Briain, Jarvis Cocker and other celebrities, to put on a show they called ‘Nine Lessons and Carols for Godless People’, at the Bloomsbury Theatre and the Hammersmith Apollo in London. This motley crew of smug self-professed humanists was intent on disgracing the much loved Christmas institution, in much the same way a Black Mass profanes the Eucharist. How they must have chuckled at their cleverness when they paid for the slogan “There’s Probably No God” to be emblazoned across 800 London double-decker buses, and all timed to coincide with
Epiphany, the celebration of arrival of the Three Wise Men bringing gold, frankincense and myrrh.

Virtuous in their indignation against religion, they set about offending every Christian in sight. Certain of their own faith in science, these contemptuous and contemptible bigots thought nothing of trampling on the beliefs of others. Such is the intellectual imperialism of scientism – a prevalent and predominant attitude among those who dogmatically project the scientific method as the one and only true way of acquiring knowledge about reality and the nature of things. They don’t seem to realise that the scientific method is limited by paradox, even in Physics - science’s backyard. Their ‘rational’ certainty in the natural laws of Physics is built on shifting sands, namely that of linear causality. All are guilty of making Science’s First Mistake.

The phrase ‘Science’s First Mistake’ is the title that Ian Angell and Dionysios Demetis chose for their new book (see www.sciencesfirstmistake.com to obtain a free .PDF download). It is a play on Nietzsche’s notorious words “Woman was God’s second mistake”. Before politically correct readers throw up their hands in disgust, they are asked first to reflect, and to recognise that this was Nietzsche’s idea of a joke. Woman was not the target of his rhetoric. No, he was referring obliquely to God’s first mistake, or rather humanity’s: namely that homo sapiens, godlike, had been put in control of the planet – the Sixth Day as described in Genesis 1, verses 27-28:
27: So God created man in his own image, in the image of God created he him; male and female created he them.
28: And God blessed them, and God said unto them, Be fruitful, and multiply, and replenish the earth, and subdue it: and have dominion over the fish of the sea, and over the fowl of the air, and over every living thing that moveth upon the earth.

How paradoxical, that in its attempts to replace God, Science should take up the baton of domination from Genesis. This too was recognized by Nietzsche in his most infamous quotation “God is Dead!”, although most people don’t realize these words are completed with “… And we have killed Him.” Here Nietzsche is pointing out the rise of secular societies, and what is of particular interest here - humanism, all grounded in the arrogance of certainty in scientism and the conceit of Modernism.
For there can be no dominion over the Earth! Control through the application of Science is a myth. There can be no permanent solutions to the ineffable human condition, only contingencies. We are all at the mercy of the Fates. Indeed, the hubris that comes with an unquestioned belief in scientific method, particularly when it is targeted at social, political, commercial, and even religious concerns is an accident waiting to happen.
It’s time to nail the big lie of the last three centuries, and stop this obsession with tidy methodical ‘rational’ solutions. ‘Understanding through scientific theory, and applied via its methods’ does not place us in control of human destiny. Indeed, there is no such thing as ‘understanding’, only mere description through observation … and observation is itself a delusion steeped in paradox. I must admit that it came as quite a shock to me, an agnostic, that the words of a nineteenth century hymn should resonate so well with my thinking:
Immortal, Invisible, God only wise
In light inaccessible hid from our eyes ...
(Hymns of Christ and the Christian Life, Walter C. Smith.)

For human observation does not allow us access to the ‘real world:’ observation is deceived by the linearity inferred in causality. We don’t observe causality in the world; a belief in causality is a necessary prerequisite of observation and cognition. Indeed, without the delusion of causality there would be no observation; observation and cognition are only possible because linearity is erroneously imposed on what is an always complex, non-linear world.

Linearity - just one thing after another; an assumption of sequential and consequential developments that are free of interference and surprise. Linearity – bring A and B together, and the outcome is predictably C: here A, B and C are the categorical ‘things’ that we observe and focus on in the world. However, that non-linear world is drowning in a chaotic bubbling alphabet soup of misinterpreted so-called ‘causes’ of previously-created effects, only for them to interact and become new ‘causes’, and on and on; any one of which may interfere with specific instances of A or B before they interact, or mess with and change C even before C’s existence has become apparent to us; and all is swamped in the delusion and paradox of observation.

Surely we must recognize that each particular A, B and C is an instance taken from an
expanding set of categories that each of us has been developing self-referentially since birth, and that form the cognitive building blocks of individual ‘understanding’. However, these categories are abstractions, ideals, parts of a map; they are not the ineffable and inaccessible things-in-theworld that they are supposed to represent – rather they are merely pale intellectual shadows created inside our heads. ‘The map is not the terrain’. “Everything that distinguishes man from the animals depends upon this ability to volatilize perceptual metaphors in a schema, and thus to dissolve an image into a concept”: Nietzsche again.

During our lifetimes, each of us continuously categorizes the things-in-the-world we observe – and we bunch each instance together with other similar things as if they are the same, and each group of similar entities is identified with a particular abstraction. However, in categorizing, that cognitive ideal must miss the unique totality of each particular instance of the thing-in-the-world to which it corresponds. Indeed, in order to observe, it is essential that we don’t observe every miniscule facet of all the components that make up the world. Without the filtering property of linearity we would be overwhelmed by the sheer enormity of the detail. This filtering out of the unobserved gives rise to interfering paradoxes that come with this categorical basis of observation; hence the imagined linear predictability of the behaviour of things-in-the-world, and the accompanying wish for control, will always prove illusory.
And yet observation is our cognitive laboratory, a place of enforced linearity, where we experiment as we make our way in the world; and that is only possible because we utilize the fiction of linearity that is categorization. It’s not only in the Harry Potter books that we humans can induce a change in the world by chanting incantations and waving a magic wand. We may not realize it, but this is what we humans do every day when we self-referentially use our categorizations/descriptions/observations of ‘objects in the real world’ (what is this but casting a magic spell) to create ideas, so that when ritually applied, the world bends to our will … usually.

However, we remain the apprentice, never to be the sorcerer – the paradoxes that stem from delusion, along with unexpected events, will ultimately conspire to upset our desired imposition of control mechanisms. Nevertheless we can create transitory stabilities that enable us to make our way reasonably successfully in the world. Our trick is to introduce social, cultural, intellectual, as well as physical artifacts into the world that form a pragmatic sink for much (but not all) of the surrounding noise, and which limits the disrupting influence of both detail and non-linearity.

However, these filters can never hold the complex world of surprises at bay indefinitely. The linear incantation that is ‘understanding’ will never totally control the non-linear world that can only be seen “in light inaccessible hid from our eyes” … in other words a world that cannot be truly seen. Or as Niklas Luhmann so eloquently puts it: “observation is only possible because it is impossible”.

Science’s first mistake is its failure to recognize there is no permanent dominion over a world that can only ever be ‘observed’ by ignoring the delusion and paradox implicit in observation itself. People in humanist glass houses shouldn’t throw stones. So please Messrs Dawkins, Gervais, Uncle Tom Cobley, and all, sort out your own mistakes, before criticizing those you see in others.

All human observation is flawed; all understanding is delusion. Man cannot understand what is happening in the world. Mankind cannot understand or communicate with God. However God, should He exist, would not operate under the same restrictions. He is not trapped by human limitations, and so it is possible that He could communicate with us. Whether humanity can grasp His messages correctly, is of course quite another matter. And that’s where faith comes in, and also why no scientist can be in any position to deny Him.

From within their own self-referential certainty many scientists see religion as absurd. Religion of course attributes Truth to an ineffable supernatural Being beyond the realms of observation and sense data, thereby displacing the paradoxes from human territory altogether. And from that
position, all non-belief is absurd.

Greece debt crisis unfolds (source The Economic Times )

Source: The Economic Times
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http://economictimes.indiatimes.com/News/International-Business/Greece-debt-crisis-unfolds/articleshow/5529954.cms
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LONDON: The markets are in a funk about the public-debt crisis in Greece. The country was clearly not ready for euro membership and now faces.

some hard choices: make savage budget cuts and plunge into a deep recession; default on its debts and lose its credit rating for a generation; plead for a bailout from its European Union partners; or quit the euro.

But, hey, there might be money to be made from this Greek tragedy. The way to do it is by swapping Hungarian bonds for Greek ones, selling the euro, ditching Spanish and Portuguese assets, and shorting the Athens stock market. The Greek crisis is accelerating all the time.

Last week, Greek bonds plunged as the markets took a look at government plans to cut a budget deficit running at 12.7 per cent of gross domestic product. Traders decided the numbers didn't add up. There was speculation that a bailout was being organised by the European Central Bank, or the EU.

Greece's troubles seeped into the currency markets, dragging down the euro. Other euroarea bond markets, in Spain and Portugal in particular, took a tumble. One wild story had Greece selling bonds to China to ease the budget crisis. The markets are demanding answers, and in the next few weeks they may get them. Greece is in the spotlight, and it will have to come up with a credible plan.

The trouble is none of the options is very appealing. If the country gets serious about curbing its deficit, most of the growth of the last decade will turn out to have been illusory. If Greece begs its euro-area partners for a bailout, it will be humiliated. If it starts printing some "new drachma" to pay back bondholders, it will be almost impossible to borrow more.

Greece will do what most of us would when faced with such a terrible range of choices: prevaricate, delay, postpone and hope something turns up.

Until the crisis is resolved, though, there will be plenty of opportunities to make money. Here are five places to start:

One: Buy every Greek bond you can lay your hands on. Greek 10-year bonds yield 6.6 percent, compared with 3.2 percent for German debt. That is a huge difference for what is essentially the same product: a government bond denominated in euros. So long as default is avoided, and Greece stays in the euro area, your Greek bonds will soar in price.

Two: Sell Hungarian and Polish government bonds. Both countries are in respectable shape economically, even if they have been hit hard by the global recession. Both aim to join the euro area at some point in the coming decade, at which point interest rates would fall in line with the ECB benchmark, and bond prices would soar. But after Greece's woes, do you think Poland and Hungary will be allowed into the euro area anytime soon?
Not likely. Short those bond markets as soon as you can.

Three: Sell the euro. Every day, EU and ECB officials line up to declare that the Greeks won't get any help. Officially, that might be true. There are plenty of ways to help out on the sly. Greece could be allowed to issue bonds jointly with other countries; the ECB could extend measures that allow it to accept Greek bonds as collateral for loans; or the EU could find a way of increasing "structural" subsidies for the Greek government.

The markets will smell a bailout, however, even if it comes packaged in some fancy label. The credibility of the euro and the ECB will be badly damaged. Investors will ditch the currency, and switch back to the dollar and the yen.

Serving time for a crime I did not commit

Jan 2010 ... 12 bulls and 13 bear market days. Where are the green shoots and signs of recovery ?

Last November, I recall joking with my friends that the worst is yet to come. Maybe a few of the asset classes and industries might start looking better in the near future , but banks are going to have a rough time ahead. . I wouldn't be surprised if we find cities and countries going bankrupt. With the high percentage of gearing and leverage applied by banks in the business transactions we find that the risks and losses are multiplied by factors of 10 to 100 if not more. Are financial rescues like the TARP and bailouts enough to save the economy? Greed in the industry would just result in all the aid and bailout money being swallowed as quickly as they are being loaned out - creating even more debt.

The few trillion dollars bailed out was meant to write off bad assets. But then have banks written off these assets? Are they no longer bad assets? If so, could someone explain how this has been achieved?

Banks still have these assets on their books. Suspension of the traditional mark to market method of accounting for the rotten assets has only resulted in a profits for banks - but on a completely baseless accounting practice.

The global economies remain very fragile with very bleak prospects for the heavily indebted economies of the US and UK. Sovereign debt crisis in economies with large and rising deficits are inevitable - and we have just started seeing examples of these in the last 2 months - and UK is in the list of such examples - its just the timing that is not clear.

Whatever measures are being taken to rescue the world economy seems too little too late and also very unsustainable.

What can be said about the banking industry is that it is a regulated oligopoly with very restricted competition. The current hue and cry of bonuses and pay scales is just a joke. Banks are free from market disciplines which apply to "genuinely" competitive industries and can therefore chose to do as they wish and pay their staff what they like. The cost is always borne by the customers and if not by the tax payers.

This makes me believe I am serving time for a crime I did not commit. I love the challenges and pressure involved in my line of work, but I am tad bit uncomfortable with the moral ethics and values of this industry. But perhaps, being a part of the system is crime enough. My fervent passion to work in the financial services industry has taken me through a roller coaster ride the last 2 years. Its had more downs than ups, but I am still here - with optimism and a fair bit of courage to see this through.

Graduate Job market - 2009 . Bleak but there is a ray of hope.

Given the dreary economic out look and the sudden freeze and uncertainty in hiring, I wouldn’t be surprised if you sometimes encounter a feeling of helplessness about landing a good job this year.

The class of 2009 could be facing the bleakest job hunt for a generation now the global financial crisis has taken its toll on traditional graduate employment sectors.

With graduate numbers increasing on an almost annual basis, any failure in the job market to reflect this increase will create a greater level of competition in an already crowded market. As a result, an increasing number of people are moving back in with parents after finishing university and failing to find a graduate job

This means that more students would be graduating this year, while the number of jobs in the offing are far below in comparison. This only means that the competetion
Focusing on the financial services industry (and other companies servicing this industry), some of them like northern rock have completely stopped hiring, other companies ML , UBS , PWC , EY etc have kept recruitment numbers pretty flat.
I feel that numbers are kep flat only to prop up their image on campus. They would also damage their brand by not maintaining contacts on campus and disbanding expert recruitment teams, leading to a corporate loss of memory and skills. To reduce numbers is significantly more favourable than suspending recruitment even for one year.

Which sectors would be recruting this year ?
1. Accountants (It is going to be accountants who have to deal with all the financial fall outs and mergers; Lehman's effectively going under and the HBOS and Lloyds merger ,T-mobile and O2 join venture etc)
2. IT (Banks are restructuring and trying to cut costs by improving IT )
3. Start ups ( best way to put your redundancy pay out to good use)

Ways out of this ?
1. Non traditional Routes –Take up additional course in fincance / accounting to supplement your IT / Management background or vice versa. There are clear signs graduates will need to be more savvy than ever in their hunt for work and not rely on the usual high numbers of vacancies available in previous years
2. Graudate Fairs - Talk to the smaller companies , management consultants and start ups- they are bound to give you more attention.
3. Networking – Obviously ! ! !
4. External Recruitment consultants – Keep chasing them until you get a job.

Collaboration and Communication within an organisation.

Fuled by the economic crisis blaming bakers for taking poor and uninformed decisions and current trends like social networking and web 2.0 have brought communication and collaboration within banks into focus.

Banks currently has several communication tools and repositories for storing and exchanging information (Variants of twitter , facbook, forums, Confluence, Sharepoint, etc.) However, the multitude of tools available has created barriers between the various IB business lines, preventing teams from learning and understanding what other teams are currently working on (i.e. new applications, different releases).

A question that most companies are trying to work out is if there are any central tools or ways to collaborate the existing tools in order to centralize the sharing of information and allow all business areas to leverage existing research and applications? Are there activities and/or forums that should be in place to facilitate the sharing of information?

This would ultimately reduce costs , imporved processes and increase collaboration and aid in leveraging the wisdom of the organisation to make informed decisions.

When we first step into an organisation like a bank, we expect that in a place filled with the greatest minds communication and collaboration would have been a problem that would have been addressed with proper governance and policies in plance. The best of the best tools and processes would be in place to help business lines speak with each other to come up with the latest complicated instruments and products at the cheapest price ( which ofcourse they would sell to the public at exhorbitant rates). Well, i find only the latter half to be true.

There are several reasons for this problem. Most banks have grown up from small organisations and until it was quite late nobody recognised the need for set standards and processes for communication. This resulted in creation of siloed business lines each adopting their own "preffered way " of communication. You would almost find glass walls in these organisations which prevent the smooth flow of information. These giants are now finding that they are left with a multitude of applications spread accross the different business line which more or less does one or more of the same subset of functionalities.

Why is this dangerous ? Well for starters - you would find that there are around 3-4 applications per user, None of these can be easily found, there is no common language between applications so the applications are also siloed just as the business line and the most dangerous of all - a communication barrier is formed which becomes part of the company culture.

I was not entirely suprised that these tools came about organically over the years. To understand why this is so, we should think about how banks are organised. Istrongly believe that banks have never been organised as a corporate with a single central management division deciding organisational wide strategies and policies. It has historically been aligned to the business or even trading desks. Each desk wants to make more money and hence their need drives IT to build tools which are the need of the hour. Not much thought was put in to consolidate tools until it was found to be unmanageable.

ADMIS time ...

Congratulations to all who have managed to secure an admit to the ADMIS Masters degree programme at LSE. Considering the bleak outlook of recession, the downgrading of UK’s economy by S&P , and the rise in unemployment figures - I can confidently say that this is a monumental decision you would have to take. To top it all we have the incapable British labour officials (who seem to be just as immoral, greedy and reckless as the bankers) making it extremely difficult for global workers to find employment in this tiny yet still significant Island.
A few of you have e-mailed me a set of concerns regarding taking up an MSc this year and I shall try answering them to the best of my ability. The questions have been around the some variant of the following themes: Required Work experience, MBA or an ADMIS, Average Salary, Job Prospects, Living expenses in London and career Paths post the degree.
First of all – I have one question – why do you want to do this course? Have you really researched this question? It is important to get this bit right as no one can tell you want you really want. This course should be considered as only a means to get you to where you want. And by no means will this course get you very far if you haven’t decided the route you want to take.

Some things you should check up on (in no particular order ) are
1. Are you planning to work in London/ England or do you plan to go back to India
2. How much is this course going to cost me? How can I make this a useful investment?
3. What are my alternatives?
4. How good are you?
Here is my take:
1. Career Prospects : I can perhaps give you an intelligent argument regarding the industry/career prospects in London, but by no means take this as the right answer – it is just my perspective. London is without a doubt one of the most important cities in the world and for the next ten years or so I hope it should still be somewhere on the top. Yes we do have the incapable Presidents and PMs of US and UK trying to increase taxes and drive the entrepreneurs and innovators and the financial think tanks out of their countries – but I am an optimist who believes that they would realise their folly before it is too late and would amend things (Richard Branson did give Brown a piece of his mind).
That aside –lets understand the current industry landscape in England. Once the heart of industrial revolution , today then manufacturing sector in the UK is pitiful and what is left is being bought out by Indian companies. But with regards to trade and investments – London is still the financial and trading capital of the world.
Once you pass out of LSE , you are most likely to land up with an Investment Bank or a Consultancy. The number of retail and mnf industries who hire out of LSE are few. We do have Aldi, P&G, Unilever , Johnson and Johnson and a few others recruiting a small minority of the students – but the numbers are truly insignificant. Many IT companies including several Indian IT companies have started targeting ADMIS candidates – but then visa is a huge issue and with the INDIAN passport having a No Entry sign to almost every country in the world things don’t look too good.
Guess the question you have to ask yourself are – the choices are limited – mainly consultancies (Deloitte, KPMG, EY ,PWC) and IBank (DB, GS, JP, Standard, HSBC, Barclays) . You would most surely get into their IT , Ops, Middle Office ,Risk and Legal or BackOffices.
Trading Floor – Difficult but yes it is a possibility – they don’t look for degrees – they look for smart asses.

If you plan to work in India- you would know better of the state of affairs there. Congress is back in power – SENSEX is going up – Does that spell green shoots of recovery –I don’t know – but I wouldn’t mind betting some money on it.

Costs vs Benefits
Fish ... this is an expensive course. 18,000 + throw in another 6000 for living making a grand sum of 24-25000 pounds. Ooops did I say pounds... Yes that is now becoming more of a joke currency. When I came to UK – the GBP touched 85. And today its fluttering around 70s (a huge 12 % discount without even asking for it. Plus with the bleeding recession – everything seems to be on sale – clothes for 2-3 quid to cheap food. The INR is expected to go up by 8% by the end of the year ( And i have a some money bet on this). Which means – pay you fee in two parts – don’t take the whole loan now. Take it in two or 3 parts. (Secret – you have till the end of the year to pay your fee – they will keep annoying you to pay for it but yea what the heck ) . Try and translate that into saving in INR – it is sizeable – about 4 lack worth of savings already.

LSE is a meeting ground for people and leaders from all over the world. And LSE is in the heart of London. The exposure you can get here is tremendous and LSE gives you a whole lots of leverage that you wouldn’t even get out of Cambridge or Oxford – only because of its location. In the past year here are a few people I have got to meet – Coffee with Gopalakrishnan (Tata Sons), dinner with James the CFO of Barrings Bank, cricket with Andrew Monroe – the youngest partner of KPMG, nets with Anshu head of Global Markets DB, Business Managers from Google, 3i investors, founders of WAYN, skype , linkedin, AIM,Skype a lot of budding entrepreneurs .... and the list is endless. This in itself is worth a lot more than money.
In my opinion, if you do want to do an MSc –this is a good time – the £ is weak, and there are hints of recovery of the economy (we are all just waiting for the politicians to stop screwing up)

The job scene in London.
As discussed – you are mostly going to apply to IBanks or consultancies. Things have been a bit slow. I was working with Lehman , lost my job last September and now working in Deutsche Bank. A lot of my friends in Lehman find themselves placed in many other banks or consultancies. It took 2-6 months for folks to find their second (or first job). There are a lot of them who are still looking or going back to their respective countries and trying their luck elsewhere. Agreeable , that things are looking better now and companies are recruiting, DB just took in 32 inters, and I heard the same with Barclays. The work of the economic shakedown is over. Those left standing are the winners and we can be quite optimistic that they would be able to tide over the recession.
A lot of people have lost their jobs in the last 6months (over 50,000 in Canary Wharf alone) So the competition is going to be very high. If you do want to get a job , previous work experience would be a great benefit. Confidence in your abilities, demonstration of your ability to work in challenging situation and good luck are of course a pre-requisite.
Avg starting salaries vary – a rough guide for graduates would be –
24-30 k at a consultancy , 30-45 k at IBanks.
Is that good enough to survive the high costs of London – yes and no. Depends on your lifestyle ;) But you will be able to find a way out. More is never enough... i find that London has a way of always keeping my bank balance in check... I have never been able to save anything here.... 

MBA vs ADMIS
The obvious questions is what do you plan to do after the course? MBA helps you start at an associate level –you cant expect to do that with and MSc. MBA opens our a lot more doors than a Masters degree – but then again it depends. An MBA from LSB, Harvard, or some of the other top BSchools open out a lot more doors than the MSc from LSE. But if you do plan to get an MBA from a 2 tier B School – perhaps it is not worth it.
Think of your degree as a currency. LSE is a high value currency in comparison to Aston or Machester or Warwick or Univ of Texas or NYU.
The roles you can get into with an MBA is more diverse than those with an MSc. But to get into a good BSchool you need 5-6 years of work ex.