My Slogs

Aerogramme - Whatever happened ?

2006-04-24T21:32:00.000-07:00

Whatever happened to Aerogramme? Those were the days of the early nineties, while at home in Bangalore, I was eagerly waiting for the mailman's rounds. As he approached out gate with bundles in his hand, I always knew what he had in store for me at a distance. It was the blue and red stripes at the envelope corners or the unique letter from USA called the "Aerogramme" with it colorful artwork on one side and legible time and date stamped on the front.

The bigger envelopes with threads or tape were from Universities and the Aerogrammes were from friends. Oh! the feelings of anticipation like a lover who may have heart throbbing reply, was about getting admission, assistant ship or photos of life on campus. There was no internet or email and everything was long hand. This was in 90's, I suddenly feel archiac and it feels good.

Fast Forward 15 years later, I am in New York. I have been trying to get hold of these Aerogrammes, so I can make an attempt to write longhand to Megha, hoping that her highschool grooming in 21st century Bangalore would give a flavor of "how it used to be?" So, I begin making the rounds to all the postoffice in New York City. But to my surprise, there was none to be found. No one told me it was stopped, the postal clerks looked at me as though I was coming from a different planet and with a little smirk or laugh were telling me " No, who uses that these days?". So, I make my final trip to the Central 24 hr postoffice on 34th street which is as wide as the whole block. I go inside stand int he information line at 10 PM and gaze at the wonderful ceilings of the 18th century and wonder, if this was a place for Piegons to deliver mail. But the paintings and geometric design made me count the triangles and the star which unavoidably looked the Star of David, making me wonder if the architect could have been Jewish or just happened to be a star.. After 10 minutes of waiting in the long hallowed hall with tall ceilings, the clerk told me , he had to find out if they still made it. I held my breadth . Something positive will turn out , I thought. Well the clerk replied , "Aerogrammes was not available at this time Please come back during day times and check out counter 33 & 34".

I was not guarentted of them, but was given some hope it could still exist and Aerogramme hope continues to linger on...

Property bubble - Whats my thought?

2006-04-22T07:56:00.000-07:00

A property bubble? Not yet, says UN report
http://www.deccanherald.com/deccanherald/apr212006/realty19732006420.asp
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Provides a wonderful insight into a certain perspective generally held
by a segment of analysts. Interesting thing is that this is a global
phenomenon with local variations of price fluctuations.

There are a lot of doom day scenarios about real estate crash which
has been constantly being played out by pessimists since 2000, that
never came . Now, the reality and understanding is setting in - It
will slow down and not crash..

Specifically, in India at the hot areas of Bangalore, Gurgoan, Pune ,
Hyderbad, etc.. Prices have really gone up, because of people being
able to afford to buy whether its the local professionals or the
NRI/Gulf investors.

But, what I don't see is "speculation" - which means people buying
property which they cannot afford and later defaulting ( a mass
default is what could lead to crash). People are making profits by
selling, but people buying are the ones who have cash or the ones who
can afford a bank loan. Speculation is happening in Miami, San
Diego, Dubai etc

The optimists are banking on that the prices will continuously go up.
There is no such free ride. What goes up must come down, but this is
a global scenario being played out. If we look at the money poured
into Bangalore Real estate from US, Europe, Hongkong, Singapore,
Local in crores.. its amazing.

Its been 7 years, since then prices have doubled and now slowing down
due to high Interest rates. Its getting beyond affordability. In my
view, the reason why its sustained is because there is Income coming
into the individuals , and the main thing is the market has expanded
and will not crash is because of a lot of middle class potential
buyers in Asia now with incomes topping the top 5% of salaried folks.

So, the strategy for investors is to use the age old formula. Buy low
and sell high after a long time ;-) Identify low cost affordable
properties in new areas/towns and keep it for a long time. Because
history has always shown that points between more than a decade has
produced growth .

The million-dollar questions for the investors is to figure out :
- what slope of the graph are they getting on?
- can they survive in case of a hard landing?
- if there is patience for the long marathon?
- can they sleep well even if its rock bottom?

Its good and wise to be prudent. But its important to note, unless we
are in the game, we will not know if we have lost or won - and
another 7 years will pass away..

Some history, I can relate to in USA is based on job growth, salary
increase, benefits etc.
1. From 1992 to 1994 - it was recession with very bad time for jobs, money etc.
2. From 2000 to 2003 - it was recession with very bad time for jobs, money etc.

This was for different reasons . But due to globalization a lot of
theories are to be redefined and a lot of economists are still
grappling with the question of how things will shape up.. My
suspecion is the 10 year cycle of downturn will come again and this
time will hit INDIA around 2011 to 2013 . may be badly or mildly ..
who knows - All I know is - I got to write the exam to either fail or
pass ;-)

> 2 cents

PS: Since India is following a little of US in its housing financing..
a good old read from harvard " Why the Housing is Strong?"

http://hbswk.hbs.edu/item.jhtml?id=3420&t=finance&noseek=one
http://www.jchs.harvard.edu/publications/finance/W02-5_Colton.pdf
http://hbswk.hbs.edu/item.jhtml?id=4342&t=finance

Finance pundits - Why I dont endorse?

2005-11-11T08:05:00.000-08:00

A snippet from a article posted in Hindu around Nov 10th 2005. My comments after that.
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My strong recommendation dear friends is that you purchase your dream house outside Bangalore. These builders just want to make good and fast money at your cost by inflating prices. Its better to hold your money if you really really want to buy a house in Bangalore else you will be losing your hard earned money to the bubble just like how investors in the stock market enter the market when its already inflated and then end up at a loss buying shares at a higher price. Always remember that - "Patience is a Virtue". Kindly guide your friends as well so that they do not suffer losses.
- P.N. Agarwal
** The author of this article is a renowned financial advisor. He writes for various editorials like The Times, The Hindu etc.
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My comments
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Just a thought, spending a decade in the financial industry.. NEVER listen to these so call pundits. There are a zillion contrarian opinions out in the market exactly opposite to the one voiced below. That's the beauty of market economy where the market forces decide the price rather than the pundits. But if someone is trying to gamble, then Gambling is always risky.

From individual perspective, I believe it comes down to what you think it is for YOU based on the market forces and ask real hard and honest questions to evaluate YOUR risk capacity. For example:

1. Why am I buying this property? Is it for investment, personal, career , emotional etc.
2. If Investment then what's the planned horizon?
3. Are you putting all your savings into this one bucket?
4. Will I still financially survive if I have to sell for whatever reason and the price has gone down.?
etc

Also keep in view the global changes happening with regard to globalization, India's economy which is growing and try to imagine 5 to 10 years from now.

Currently the approx :
Price of apartments = Land Value + Cost of Construction + Profits + Govt fees.

So, here the only Land value and Profits are huge variables. Cost of Construction , by and large is fixed and it will only go up (note china's appetite & middle east for oil)

My thinking is that author is just referring to people who are looking for investments and have a choice. There is some common sense truth to the article. His blind recommendation to purchase outside Bangalore sounds very logical (most laymen like you and me think this way) , but not based on Facts. Remember the obvious a PRICE = function( What someone is willing to BUY for & What someone is willing to SELL for) which decides whether its a seller market or buyers market.

So, if everyone goes outside Bangalore to BUY, Then if : Num or buyers > Num of sellers will lead to hike is Price.

Bottom line: Its what you think. Collectively could become what Market Thinks..

Foreign policy - Whats the truth?

2004-05-04T08:12:00.000-07:00

Its interesting to read Karas hope - "I have hope that both of
the major parties will someday stop slapping a band aid on a cut
that needs stitches - and look at real viable solutions to our
foreign policy problems - not just blowing up parts of countries

someday. " I completely agree on this point as its resonates with
what I had in mind.

I am originally from India, and getting
familiar with the political parties issues etc here. My view
about both the parties (after coming to power) with regard to
Foreign Policy. I believe that at the basic level,for both the
parties the Core American Interest is top priority. In the
process to achieve short term gains, I see a policy pattern by
both parties which has had both good and bad aftermaths. I am
sure most of you know the good and bad things which happened.
(dates are approx)
1. World war : getting Stalins support to crush Hitler

2. 1979-89(Afgan war) : getting Afgans(mujahiddin) &
Pakistan dictators support to crush Soviets. In the process
closing an eye on Pakistans Nuclear programme & distribution to
NorthKorea, Libya, Iran etc. (this did not happen just a few
weeks ago). Also led to Alkeda etc..

3. 1980-86 (Iran-Iraq war):
support Saddam (with chemicals etc) to crush Iran. i hear the
DefenceSec. had some cosiness before with saddam

4. Dr.Kissingers & Nixons exploits in Vietnam and other dramas in
South America.
(I am not familar much- but know the gist of what happened - if
the documentry accounts are true ;-)

5. Support for
Dictators/Theocracies: Blind support for Egypts regimen,
Pakistan, Saudi Arabia, Chile etc #2 issue Afgan war is an eye
opener for me as it was close to home - India at that time while
I was there and I have been reading a book on the 80's Afgan
war. Charlie Wilson's War: The Extraordinary Story of the
Largest Covert Operation in History by George Crile . Shows how
a congressman(Joe Wilson) and a pakistan dictator (Ziahul haq)
had a good time.

Some of my conclusions are : 1. When it comes
to Foreign Policy both the parties are not truthful ( in the name
of greater good or national security) to the American Public.

2.I feel (after staying here for a decade now) that American people
are honest and trust their politicians more than any other
democratic setup (like in europe, india, etc). It continues to be
so even after reading the secret reports (opened after sometime).
That means to say American public are forgiving, or naive or
dont-care attitude when it comes to their leaders flawed foreign
policy. A good example as Kara points out. A bar manager is more
accountable to his clients welfare, than the president. How can
this happen? . I am running out of issues now.I think I made my
point.

In summary, Both the parties are not truthful to their
people and have some consistent flawed foreign policies. But my
hope is that the American people's good ness will get the
upperhand and be seen by the outside world - as I see it .