Wednesday, December 12, 2012

GLOBAL CREDIT CRISIS: MAYHEM

The financial crisis brought the world to its feet!

Bear Stearns, Fannie Mae, Freddie Mac, Lehman Brothers, Merrill Lynch and American International Group (AIG), are all in a perilous state today. The Federal Reserve on its part has been adding every bit to the domino effect. Its loan of $114 billion to protect the creditors of Bear Stearns and the US Treasury’s backstopping of $5.2 trillion in Fannie Mae and Freddie Mac sent a wrong signal to the failing behemoths. Lehman Brothers, stating that it had debt of $613 billion (with an asset base was of $639 billion) opted for Chapter 11. Days later the Federal Reserve gave $85 billion loan to AIG for a 79.9% stake. Mark Zandi, Chief Economist, Moody’s Economy.com, avers, “The crisis began with sub-prime mortgage borrowers defaulting on their loans, driving many private lenders out of businesses and causing billions in losses for investors. A year later, the crisis has engulfed a growing number of prime borrowers as well, pushing them financial brink and costing investors billions more.” In hindsight a number of reasons can be attributed to the mayhem like lack of government regulation and poor judgment of credit-worthiness of borrowers et al. All-in-all though, this crisis shook all, across the world!


Source : IIPM Editorial, 2012.
An Initiative of IIPMMalay Chaudhuri

For More IIPM Info, Visit below mentioned IIPM articles.

Sunday, December 9, 2012

SCHOOLS: TEACHERS TRAINING

Would electric shocks be next?

The number of primary schools in India is around 650,000. Although in the 11th Five Year Plan, the government has decided to spend Rs.31,200 crores on various skill development programs across all primary and secondary teachers, it is still unclear how much money will be channelised for soft skill development. But still, seeing that the Central Government has been spending just around Rs 9 crores for various training purposes annually, the new figures is dramatically proactive and positive towards addressing the issue.

Human rights education in itself will be a key way of developing awareness of discrimination; it also could be conveniently integrated as a part of the current social studies curriculum. What remains unfulfilled is the setting up of a quasi-judicial national commission specifically for students that could address nationwide student complaints against teachers. Would the government act on this fast or would it wait till students start getting electric shocks?


Source : IIPM Editorial, 2012.
An Initiative of IIPMMalay Chaudhuri

For More IIPM Info, Visit below mentioned IIPM articles.

Friday, December 7, 2012

STEVEN PHILIP WARNER takes a closer look...

Do their M&A predictions really work? And is there some ‘secret learning’ even they know nothing about? STEVEN PHILIP WARNER takes a closer look...

research be damned!


We started with the yet to be published book titled, Winning in Turbulence, by Darrell Rigby of Bain & Company (thanks to Harvard Business Press). After statistically analysing more than 24,000 deals between 1996 and 2006, the book notes that, “acquisitions completed during and right after the last recession (2001–2002) generated almost triple the excess returns of acquisitions made during the preceding boom.” The book conclusively proves how those companies that are active dealmakers even during downturns, finally outperform those that are not, in the long run! Dr. Sotirios Paroutis, Asst. Prof. of Strategic Management, Warwick Business School, puts his thoughts in a few lines as, “Deals born in recession will be much more robustly constructed as reduced optimism should result in lower prices paid and more emphasis being placed upon certainty, scrutiny and cost-cutting efficiencies.” The ‘secret to success’ was revealed by Pankaj Karna, Partner & Head, M&A, Grant Thornton as, “To focus on strengths and core competencies and your target. Price of the deal is also important as typically deals during a downturn would be largely based on the fundamentals and with limited liquidity...” Well, strong words there, but they weren’t still enough to convince us. And who in the world will believe that deal making is sensible during downturns, especially when even shareholders have shed all optimism about stock-swaps?!

We took a first-hand look at numbers, and were completely taken aback by the difference in opinion... So what was our claim? That companies did not indulge in splurging cash for assets during recession? Well, here are some numbers that we analysed – if we told you that $1.25 trillion and $1.23 trillion are figures that represented deal totals during two equal time-periods, one of which was recession and the other one an upturn, which one would you associate with which cycle? Confusion prevails… but obviously, the higher investments should represent the crest of the macroeconomic wave, right?


Source : IIPM Editorial, 2012.
An Initiative of IIPMMalay Chaudhuri

For More IIPM Info, Visit below mentioned IIPM articles.


Thursday, December 6, 2012

Are you doing your ‘job’ well?

If you’re not the apple of your boss’s eye, don’t sulk! Ask the right questions, of yourself!

Chances are high, that, in this world of contradictions, you find a boss who’s not worthy of being a boss. Considering, www.badbossology.com is the very first search result of the keyword ‘bosses’ on Google, it is proof enough of the high incidence of this contradiction. So what should one do when the boss is somewhat like Dilbert’s pointy haired boss – ‘childish, immature, ignorant, and rude, yet also annoyingly cheerful and oblivious to his own actions?’ Quitting would be a bad option in these times of recession, but dealing with it certainly offers hope!

Such a challenging boss either doesn’t divide the work appropriately or favours certain employees (knowingly or unknowingly) or keeps developing new rules and policies for the employees or simply just doesn’t play fair. Though, earlier, such bosses were declared jerks outright, diplomatically speaking, they’re called bosses with low emotional intelligence.

Well, to deal with one of the most popular traits – favouritism – of such bosses, one needs to have three basic qualities; namely, patience, work ethic and a good sense of humour! The first thing is to be realistic; your boss is only human, so it is very normal for him to enjoy the company of some people better than others. If his preference is overtly visible, you can only forgive him for not being sharp enough. Of course, you must recognise if the favouritism is real or is just attachment with an employee due to longer association with him.


Source : IIPM Editorial, 2012.
An Initiative of IIPMMalay Chaudhuri

For More IIPM Info, Visit below mentioned IIPM articles.

Wednesday, December 5, 2012

Cinema on 18mm

Here’s a new avenue for individuals to unleash their creativity: Cell phone cinema!

Many people may argue that mobile phone radiation is harmful to one’s health. Some say it can damage one’s DNA; some put up videos on YouTube showing how it can cook an egg and even make popcorns! Worst of all, phones with cameras are often used by the disoriented and perverted minds to come up with scandalous MMS videos. However, Asian Academy of Film & Television (AAFT) has given mobile phone users a new direction, toward the art of movie making. So, as it goes ahead promoting this radiation-emitting monster, no one, as yet, is complaining. This year, on 21st January, 2009, it organised the 2nd International Film Festival of Cell Phone Cinema, which aims at providing a platform for creative individuals to create masterpieces by making use of this rapidly growing technology. Here, the competition was in the field of fiction/music videos, reality/electronic news gathering, and still images, wherein the participants are expected to use mobile phones only in order to take photographs, and videos are not to exceed the time limit of three minutes. The competition witnessed 500 entries from over 20 countries.

They were judged by a jury, which comprised a mix of Indian and international personalities such as Karl Bardosh, Master Professor, Tisch School of Arts, NYU and the pioneer of these awards; Kurt Inderbitzin, Hollywood Film producer/director; Rahul Rawail, film director; Pankaj Prashar, film director; and Arun Anand, still photographer. The winners for the video films were All Elements of Hand – Ek Kavita by Sachin Sreshta and Mukti Krishnan as well as Rainwaters by Sachit Sadanandan; which won US $1,000 and US $500 respectively.


Source : IIPM Editorial, 2012.
An Initiative of IIPMMalay Chaudhuri

For More IIPM Info, Visit below mentioned IIPM articles.

Monday, December 3, 2012

Your MNC, your cancer!

MNCs are hailed as national treasures in some countries; but their devil-may-care attitude results in many tragedies – both industrial and health – making them reasons for global shame

Globalisation is inevitable as we reside in a ‘global village’. And the entities which benefit the most, perhaps, out of this phenomenon are modern day centres of affluence and influence – MNCs. As they profit and in the process, enhance employment and production, what goes unnoticed is that their drive to profit, which leaves many in pain, is encouraged by their lack of concern and efforts towards safe working of their industrial units across the globe.

A McKinsey report has exemplified that the cumulative market value of top 10 Fortune 500 companies is equal to the combined GDP of India and Brazil or total forex reserve of six leading Gulf oil exporting countries in 2006; at the same time, the clearly irresponsible, greedy and biased business policies and activities of these MNCs – and we tread quite firm ground when we partake of such suppositions – without considering people, environment and legal aspects, have brought a quasi-apocalypse in the form of fatal industrial accidents, environmental hazards and pollution related health issues affecting millions in innumerable ways. If the Bhopal gas tragedy in 1984 (which we dare say has become a staid benchmark) can be considered the most horrifying industrial catastrophe in history, claiming between 3,000 and 20,000 lives, leaving thousands with serious diseases and injuries, what we consider worse is the knee jerk reaction of Dow Chemicals – the global giant providing innovative chemical, plastic and agricultural products and services and responsible for this industrial catastrophe – which publicly disowned its accountability. Consider the amount with which Dow tried to console affected families – a mere $300-$500.


Source : IIPM Editorial, 2012.
An Initiative of IIPMMalay Chaudhuri

For More IIPM Info, Visit below mentioned IIPM articles.

Sunday, December 2, 2012

Pride, prejudice & parachutes!

Despite the heroic 'parachute' attempt by the US government, Citi's landing seems hardly soft

Let us pay our humble tributes to all those unfortunate doomsayers (the list includes us too!) who doubted the optimistic presentation of Citigroup CEO Vikram Pandit on the announcement of Citigroups results for the quarter ending September 2008. His speech was peppered with innuendoes like "We are proud..." and "We are making excellent progress..." And our response to that, was a plain and simple "Bah!"

We admit, our game is up. Citigroup's latest bailout from the Fed is definite 'progress' and Citi deserves to take 'pride' in it too! US Treasury (which itself seems to be a likely bailout candidate as it tries to water down recessionary fires here and there with buckets of cash!), Federal Reserve and FDIC have agreed to a $326 billion bailout package for Citi Group. The Treasury will give $20 billion in loan and $306 billion as guarantee for Citi’s toxic assets. In return, Citigroup will issue $7 billion in preferred stock and warrants to the Treasury and FDIC for approximately 254 million common shares of the company at a strike price of $10.61. Besides, Citi has agreed to halt dividend payments for the next three years and agreed for scrutiny on executive compensation.

But are Citi's demons truly licked? A few days earlier, on November 18, 2008, Citigroup announced that it would cut down more than 50,000 of its jobs across the board. The biggest problem for Citi is its huge size which is based on ‘the diversification of financial services model’. In terms of revenue per employee, Citi registers some $488,000, after factoring the job cuts, way below Bank of America’s $568,000 and JP Morgan’s $644,000.


Source : IIPM Editorial, 2012.An Initiative of IIPMMalay Chaudhuri

For More IIPM Info, Visit below mentioned IIPM articles.