Google Inc, owner of the most- visited Internet search engine, plans to release a computer operating system to challenge the dominance of Microsoft Corp’s Windows.
The software will be based on the Chrome Web browser, Mountain View, California-based Google said in a blog post. It will be designed for low-cost laptops called netbooks at first and will be available to consumers in the second half of 2010.
Google’s plan intensifies the company’s competition with Microsoft, the world’s largest software maker. In addition to Web browsers, the companies compete for Internet-search users. Google is also going after users of Microsoft’s Office software by offering online word-processing and spreadsheet programs.
“We hear a lot from our users and their message is clear - -- computers need to get better,” Google said. “The operating systems that browsers run on were designed in an era where there was no Web.”
The Chrome OS will be open-source, meaning the program code will be open to developers, Google said. The software will work on top of Linux, the open-source operating system, Google said.
Google said the Chrome OS is separate from its Android software, which was initially designed for mobile phones. The new operating system is designed to prevent users from having to deal with viruses and security updates, Google said.
Wednesday, July 8, 2009
Sunday, March 15, 2009
Dealing with Control Freaks!!!
Article Focus:
In this article, Creative Cow's Ron Lindeboom looks at dealing successfully with clients who will not let you get a word in edgewise, don't listen to you when you do speak and interrupt you in mid-sentence and refuse to compromise on any point. They also do not remember a word you said and would sometimes even rather spend a bunch of money in court than pay you what is honestly due you. If you recognize any of these traits, chances are you have a ''control freak'' on the line. Here are some tips on dealing with them...
First thing, right out of the gate, let's get one thing clear: Not all control freaks are bad for business. Sure, they can be irritating and even down-right obnoxious at times but they are also often true perfectionists with vision who know exactly what they want and if you are successful in helping them get there, they often make great clients. Clients who can write some hefty checks to you as they sweat through the minuitae and detail of finding exactly what they want.
You would be smart when working with control freaks to always make sure that they are billed on the clock and not at a flat rate. Flat rates and control freaks do not a happy marriage make -- well, at least not when you are the one who will end up paying for the wedding.
What Are the Tell-Tale Signs of a Control Freak?
It is fairly easy to spot a control freak in your business. They give off a long list of predictable signs that leave as indelible an impression as an alley cat scent marking its territory. Though there are many more signs that we won't cover here for the sake of brevity, some of these signs include:
- They never seem to want to listen to you.
- They regularly and with no regard interrupt you in mid-sentence.
- Your ideas are not welcome, except when they agree 100% with those of the control freak.
- They call you at inopportune times and will not get off the phone, even when you tell them you have another client present.
- They will drop you like a rock if you correct them and are proven to be correct.
- They will drop you like a rock if you are better than them in their field of endeavor.
- They regularly complain that you are over charging them. (Never relent on this point and keep them on the clock or my only words to you are "Heaven help you.")
- They will spend hours (if you let them) drowning you in trivia and detail on ideas and systems that will have you wanting to pull out your hair and send you running screaming from the room.
- They will cheat you if they can get away with it and will always have brilliant reasonings and justifications as to why you deserve this.
- They will spend way more than they owe you to beat you in court. Remember: They are control freaks.
- Lastly, they know everything. Just ask them.
This list is in no way comprehensive but you get the point.
Then Why Deal With Control Freaks?
If there are so many negatives associated with control freaks, then why deal with them? It's simple: Some control freaks have many of the negative character traits but are also very visionary and their sense of perfectionism makes them a great client if you can find ways to work with them and keep them from falling behind in their payments that you should be collecting at key points during the project. As milestones are reached during the project, bill them for that part of the job. This is an effective way to train them and once they are "committed by wallet" to you, they can make good clients.
Ways & Methods of Dealing With Control Freaks:
The challenge to you as a businessperson is to direct them without making them feel that you are correcting them constantly. This will just anger a control freak. Better to let them think that every decision and conclusion that you may be helping them arrive at, is being made 300% by them -- 100% doesn't communicate the importance of this point. You must find ways to play to and validate their ego without appearing condescending or that you are leading.
Control freaks have to lead and you will be well-served to understand that point coming out of the gate. A control freak will often surround themselves with people who don't even know what they are doing just so that they can appear even more knowledgeable and expert in their own eyes. If you are an expert, it is far smarter to remember that God gave you one mouth and two ears and use that lesson in priorities to your advantage with the control freak.
Keep in mind that control freaks are ego maniacs and anything that is viewed as corrective or as not coming from them will quickly place you in the "them" category in the "us and them" thinking of the control freak. Learning this lesson well could place you as one of the only people they trust in a world full of "thems."
Understand that you are not really ever going to "win" with this kind of client -- well, unless you remember that in business the sweetest victory is cashing the check. Check your ego at the door and let your words be few. After all, the control freak will talk enough for the both of you anyway! And it's likely that they will even ask you the question and tell you what you answer is going to be anyway. Remember the check. That will help.
As mentioned earlier, never work with a control freak on a "pay at job completion" basis. If you do, you will live to regret that decision. Always work on "milestones" and bill for work up to that milestone. Consider this as a means of getting this kind of client to give you "the little 'yes's'" that salespeople look for when they ask closing questions that make a prospect answer yes. Getting them to agree that you are doing your part is paramount to having them accept you into their circle of "us" and kept you from falling into the "them" category. If you allow the billing to mount until the jobs completion, you will invariably fail them for some reason or other and end up in the "them" pile along with a bill that they will usually fight you about paying.
Let circumstances and the mounting time they are running up on the clock erode their boundless self-confidence. Time wears away stones and great mountains, so it will also win in the battle with the control freak. That is, if you have been billing the milestones and haven't let it all slip into one big billable mess at job's end.
Ref: http://library.creativecow.net/articles/lindeboom_ron/dealing_with_control_freaks.php
Saturday, March 14, 2009
Bar codes to store video!
- Can a song be 'downloaded' from a bar code printed on paper?
- Researchers at the Edith Cowan University say so. They say that this is possible with mobile phones that are equipped with a camera. When such mobile actually scan the bar code -- Mobile Multi-Colour Composite (MMCC) 2D-Barcode -- that is printed on a paper, they will actually be 'downloading' a video or audio that is stored in the bar code.
- The MMCC is a colour two-dimensional barcode designed for storing high capacity data on printed media and displays, tailor made for camera mobile phone applications. Using the MMCC, the user can retrieve digital content to their camera mobile phone directly from the barcode by capturing an image of the barcode and decoding it on their mobile.
- Confused? The trick appears to be the encoding of information that goes into the MMCC at the time it is printed. Once the mobile phone scans the image, a decoding software that it possesses, can reveal the information. This information can be anything -- voice, video, text, image etc.
Tuesday, March 3, 2009
Marketing Tips To Attract Kids
- In order to attract kids you first have to understand how kids think. Make sure that your staff attending your kid customers knows they should address kids as what they are. Kids think with urgency and when they have something in mind, they want it at the same moment; they are not willing to wait. So now you need to think like a kid. Remember your childhood and think of the things that make you smile and laugh and things which will be useful to you for fun making. When marketing to kids, be a kid.
- Make your products visible to kids so that they can have a feel of that. When you go to shopping mall you generally see that the last shelf contains all the items related to kids like toys, chocolates etc. Have a contest, with the prizes.
- Be kid-friendly. Tell them to come back over and over again...they will listen. Word of mouth advertising continues to be one of the most powerful tools in any business. Allow kids to carry your message.
- The thoughts of kids are very imaginative and creative. They like things which are different and attractive. They have very wild imagination. Like you would have observed in a movie called Taare zammen par that when the Kid is being given a test paper to solve Math’s question there we see that he goes into his own wild imagination to solve one problem. So u can keep in your display set the toys which attract the children and are really creative.
- To attract the kids you can even demonstrate how the toy works and by seeing that kids feel really happy and they do enjoy and once the product is into their mind then the kids will make sure that they have that product is in their hands.
- Kids love to learn about other cultures and new things. They often picture themselves in other places, countries and dream about traveling through planes, cars, boats, etc. So you can also project such things.
- Make sure that the item you are selling is kids friendly so that it can be operated by kids easily. Items that may have a wind-up, pull-back, press-n-go, etc. mechanism are great. If you choose an item that requires the motor skills of a 25-year-old to operate, you will end up with a very frustrated young customer.
- Kids love to learn and to share information. If you have the chance to buy a toy with a bilingual insert card, do it! Kids love to learn about other languages and cultures.
- Dinosaurs: Yes, these are not extinct in kids’ minds. They are one of the most popular things which kids would like to have with them.
Business Etiquettes
Etiquette is the way a person presents himself to others, being comfortable and making other people around comfortable. It is very important to practice good manners and etiquettes in order to succeed in your business, be liked by people and maintain good relationships with clients, customers and employees. Complying with popular etiquettes that are prevalent in the region where one is working plays an important role in determining the success level of a person’s commercial endeavor. Etiquette is a very important factor in determining the success or failure of a business or a person. It is easier to make money than to earn respect and accolade from people who know and interact with you like colleagues and employees. Life will definitely be easier if you follow the following Tips on Business etiquettes.
- Make sure to treat each person you interact with such as a secretary or a janitor, no matter what his or her position in the corporation, with respect and make it a rule to be pleasant to everybody no matter what the situation is.
- Let people know that you appreciate what they do which will boost morale and improve work quality.
- Keep records of people who matter to you and acknowledge if they receive a promotion and wish them on their birthdays.
- When organizing meetings make sure that all the participants know about the schedule, the objective of the meeting, matter that is to be discussed and the expected duration of the meeting.
- Distribution of minutes and summaries of meetings and thanking each participant after meetings is a basic courtesy.
- Always return calls, if you are unable to answer have a polite message on the answering machine that will be returned at the earliest. Never be rude or impatient with anyone on the phone.
- Never make anyone wait, be it an employee or employer, or a business acquaintance. Never be late for a meeting or for work.
- Dress is also a very important aspect in maintaining good business etiquette. Businessmen have to appear impeccably groomed
- Women have to dress appropriately and take care that they do not give a wrong impression to their colleagues. Proper care taken can avert a lot of embarrassment.
- Make sure your employees practice good etiquettes to customers and to each other to be able to work in a friction free atmosphere. Smiling courteous service will definitely help improve business and make a customer become regular.
Things to avoid:
1. Business Etiquette Mistake #1: A Poor Introduction: A handshake is the first impression another person gets of you in the business world. Fumbling here might mean that you're judged to be an undesirable candidate for a job, partner for a business venture, or employer for a promotion. Remember, in the business world, every time you see a career acquaintance both inside and outside of the office, you'll be shaking hands, meaning that your whole business life will be filled with mini introductions. A firm handshake is first and foremost important. If you have a weak handshake, you may come off as a weak businessperson. In addition, stand up to shake someone's hand if you have been sitting and make eye contact. When you are meeting someone for the first time, it is also proper etiquette to repeat his or her name, which will help you remember the name for later as well. Forgetting someone's name is a sure way to make a bad impression!
2. Business Etiquette Mistake #2: Drinking Too Much: At business functions like dinners, holiday parties, and social hours, it is common for the company to pay for an open bar. Even if there is not an open bar, a cash bar or wine may be available. Whatever the case, avoid having more than one or two drinks. These events are meant to be a time for networking; if you want to get drunk, go out to the bar with your friends on the weekend. By drinking too much, you'll come off as unprofessional and you may be labeled as uncommitted to the company. It may also lead you to saying things that you shouldn't say, and it can even be dangerous if you choose to drive home afterwards. Avoiding the consumption of alcohol altogether is the best bet, but if the situation presents itself, exercise a little self control and minimize the number of drinks you have.
3. Business Etiquette Mistake #3: No Table Manners: People are often intimidated by business dinners at fancy restaurants, but if you keep just a few basic rules in mind, you'll eloquently survive any meal. Start with learning what silverware to use. In general, start from the outside and work in, saving the fork and spoon at the top of your plate for dessert. The ladies at your table should be served first, but even if they aren't, wait until everyone at the table has their food before you begin eating. Of course, keep you napkin on your lap, and thank a server who refills your glass.
4. Business Etiquette Mistake #4: Forgetting Your Manners During Emails: As communication technology changes, there are more and more business etiquette rules to keep in mind. One of the biggest mistakes the people make in regards to business etiquette is writing emails that are too casual or inappropriate. Today, email is the communication method of choice, whereas once paper memos were sent. When you're writing any email, use care to keep it professional and polite. In fact, you should think of an email as you would a typical letter. Always address it to the person receiving the email, use proper grammar and spelling, and close with your full name and contact information. In addition, avoid using your office email to send other in the office funny, cute, sentimental, personal or chain emails. If you want to send these kinds of emails, get a free Yahoo!, Google, or MSN email account and use that. Your company email should only be used for professional purposes, like sending memos or asking questions about work-related projects.
5. Business Etiquette Mistake #5: Being Too Casual With Superiors: Lastly, one of the worst - if not the worst - business mistakes you can make is treating your superiors as friends. While some bosses and employees become very close, this is not the rule, and you should always treat your relationship as one that is strictly for business. Do not call someone by his or her first name until prompted to do so, and do not assume that you can take liberties without asking permission, even if it was not a problem in the past. The key is professionalism. Recognize how you're like to be treated were you the boss, and show your superiors that same respect. And who knows? If you avoid this top five business etiquette mistakes, you might actually be that boss someday!
1. Business Etiquette Mistake #1: A Poor Introduction: A handshake is the first impression another person gets of you in the business world. Fumbling here might mean that you're judged to be an undesirable candidate for a job, partner for a business venture, or employer for a promotion. Remember, in the business world, every time you see a career acquaintance both inside and outside of the office, you'll be shaking hands, meaning that your whole business life will be filled with mini introductions. A firm handshake is first and foremost important. If you have a weak handshake, you may come off as a weak businessperson. In addition, stand up to shake someone's hand if you have been sitting and make eye contact. When you are meeting someone for the first time, it is also proper etiquette to repeat his or her name, which will help you remember the name for later as well. Forgetting someone's name is a sure way to make a bad impression!
2. Business Etiquette Mistake #2: Drinking Too Much: At business functions like dinners, holiday parties, and social hours, it is common for the company to pay for an open bar. Even if there is not an open bar, a cash bar or wine may be available. Whatever the case, avoid having more than one or two drinks. These events are meant to be a time for networking; if you want to get drunk, go out to the bar with your friends on the weekend. By drinking too much, you'll come off as unprofessional and you may be labeled as uncommitted to the company. It may also lead you to saying things that you shouldn't say, and it can even be dangerous if you choose to drive home afterwards. Avoiding the consumption of alcohol altogether is the best bet, but if the situation presents itself, exercise a little self control and minimize the number of drinks you have.
3. Business Etiquette Mistake #3: No Table Manners: People are often intimidated by business dinners at fancy restaurants, but if you keep just a few basic rules in mind, you'll eloquently survive any meal. Start with learning what silverware to use. In general, start from the outside and work in, saving the fork and spoon at the top of your plate for dessert. The ladies at your table should be served first, but even if they aren't, wait until everyone at the table has their food before you begin eating. Of course, keep you napkin on your lap, and thank a server who refills your glass.
4. Business Etiquette Mistake #4: Forgetting Your Manners During Emails: As communication technology changes, there are more and more business etiquette rules to keep in mind. One of the biggest mistakes the people make in regards to business etiquette is writing emails that are too casual or inappropriate. Today, email is the communication method of choice, whereas once paper memos were sent. When you're writing any email, use care to keep it professional and polite. In fact, you should think of an email as you would a typical letter. Always address it to the person receiving the email, use proper grammar and spelling, and close with your full name and contact information. In addition, avoid using your office email to send other in the office funny, cute, sentimental, personal or chain emails. If you want to send these kinds of emails, get a free Yahoo!, Google, or MSN email account and use that. Your company email should only be used for professional purposes, like sending memos or asking questions about work-related projects.
5. Business Etiquette Mistake #5: Being Too Casual With Superiors: Lastly, one of the worst - if not the worst - business mistakes you can make is treating your superiors as friends. While some bosses and employees become very close, this is not the rule, and you should always treat your relationship as one that is strictly for business. Do not call someone by his or her first name until prompted to do so, and do not assume that you can take liberties without asking permission, even if it was not a problem in the past. The key is professionalism. Recognize how you're like to be treated were you the boss, and show your superiors that same respect. And who knows? If you avoid this top five business etiquette mistakes, you might actually be that boss someday!
Business Etiquettes
Etiquette is the way a person presents himself to others, being comfortable and making other people around comfortable. It is very important to practice good manners and etiquettes in order to succeed in your business, be liked by people and maintain good relationships with clients, customers and employees. Complying with popular etiquettes that are prevalent in the region where one is working plays an important role in determining the success level of a person’s commercial endeavor. Etiquette is a very important factor in determining the success or failure of a business or a person. It is easier to make money than to earn respect and accolade from people who know and interact with you like colleagues and employees. Life will definitely be easier if you follow the following Tips on Business etiquettes.
- Make sure to treat each person you interact with such as a secretary or a janitor, no matter what his or her position in the corporation, with respect and make it a rule to be pleasant to everybody no matter what the situation is.
- Let people know that you appreciate what they do which will boost morale and improve work quality.
- Keep records of people who matter to you and acknowledge if they receive a promotion and wish them on their birthdays.
- When organizing meetings make sure that all the participants know about the schedule, the objective of the meeting, matter that is to be discussed and the expected duration of the meeting.
- Distribution of minutes and summaries of meetings and thanking each participant after meetings is a basic courtesy.
- Always return calls, if you are unable to answer have a polite message on the answering machine that will be returned at the earliest. Never be rude or impatient with anyone on the phone.
- Never make anyone wait, be it an employee or employer, or a business acquaintance. Never be late for a meeting or for work.
- Dress is also a very important aspect in maintaining good business etiquette. Businessmen have to appear impeccably groomed
- Women have to dress appropriately and take care that they do not give a wrong impression to their colleagues. Proper care taken can avert a lot of embarrassment.
- Make sure your employees practice good etiquettes to customers and to each other to be able to work in a friction free atmosphere. Smiling courteous service will definitely help improve business and make a customer become regular.
Things to avoid:
1. Business Etiquette Mistake #1: A Poor Introduction: A handshake is the first impression another person gets of you in the business world. Fumbling here might mean that you're judged to be an undesirable candidate for a job, partner for a business venture, or employer for a promotion. Remember, in the business world, every time you see a career acquaintance both inside and outside of the office, you'll be shaking hands, meaning that your whole business life will be filled with mini introductions. A firm handshake is first and foremost important. If you have a weak handshake, you may come off as a weak businessperson. In addition, stand up to shake someone's hand if you have been sitting and make eye contact. When you are meeting someone for the first time, it is also proper etiquette to repeat his or her name, which will help you remember the name for later as well. Forgetting someone's name is a sure way to make a bad impression!
2. Business Etiquette Mistake #2: Drinking Too Much: At business functions like dinners, holiday parties, and social hours, it is common for the company to pay for an open bar. Even if there is not an open bar, a cash bar or wine may be available. Whatever the case, avoid having more than one or two drinks. These events are meant to be a time for networking; if you want to get drunk, go out to the bar with your friends on the weekend. By drinking too much, you'll come off as unprofessional and you may be labeled as uncommitted to the company. It may also lead you to saying things that you shouldn't say, and it can even be dangerous if you choose to drive home afterwards. Avoiding the consumption of alcohol altogether is the best bet, but if the situation presents itself, exercise a little self control and minimize the number of drinks you have.
3. Business Etiquette Mistake #3: No Table Manners: People are often intimidated by business dinners at fancy restaurants, but if you keep just a few basic rules in mind, you'll eloquently survive any meal. Start with learning what silverware to use. In general, start from the outside and work in, saving the fork and spoon at the top of your plate for dessert. The ladies at your table should be served first, but even if they aren't, wait until everyone at the table has their food before you begin eating. Of course, keep you napkin on your lap, and thank a server who refills your glass.
4. Business Etiquette Mistake #4: Forgetting Your Manners During Emails: As communication technology changes, there are more and more business etiquette rules to keep in mind. One of the biggest mistakes the people make in regards to business etiquette is writing emails that are too casual or inappropriate. Today, email is the communication method of choice, whereas once paper memos were sent. When you're writing any email, use care to keep it professional and polite. In fact, you should think of an email as you would a typical letter. Always address it to the person receiving the email, use proper grammar and spelling, and close with your full name and contact information. In addition, avoid using your office email to send other in the office funny, cute, sentimental, personal or chain emails. If you want to send these kinds of emails, get a free Yahoo!, Google, or MSN email account and use that. Your company email should only be used for professional purposes, like sending memos or asking questions about work-related projects.
5. Business Etiquette Mistake #5: Being Too Casual With Superiors: Lastly, one of the worst - if not the worst - business mistakes you can make is treating your superiors as friends. While some bosses and employees become very close, this is not the rule, and you should always treat your relationship as one that is strictly for business. Do not call someone by his or her first name until prompted to do so, and do not assume that you can take liberties without asking permission, even if it was not a problem in the past. The key is professionalism. Recognize how you're like to be treated were you the boss, and show your superiors that same respect. And who knows? If you avoid this top five business etiquette mistakes, you might actually be that boss someday!
1. Business Etiquette Mistake #1: A Poor Introduction: A handshake is the first impression another person gets of you in the business world. Fumbling here might mean that you're judged to be an undesirable candidate for a job, partner for a business venture, or employer for a promotion. Remember, in the business world, every time you see a career acquaintance both inside and outside of the office, you'll be shaking hands, meaning that your whole business life will be filled with mini introductions. A firm handshake is first and foremost important. If you have a weak handshake, you may come off as a weak businessperson. In addition, stand up to shake someone's hand if you have been sitting and make eye contact. When you are meeting someone for the first time, it is also proper etiquette to repeat his or her name, which will help you remember the name for later as well. Forgetting someone's name is a sure way to make a bad impression!
2. Business Etiquette Mistake #2: Drinking Too Much: At business functions like dinners, holiday parties, and social hours, it is common for the company to pay for an open bar. Even if there is not an open bar, a cash bar or wine may be available. Whatever the case, avoid having more than one or two drinks. These events are meant to be a time for networking; if you want to get drunk, go out to the bar with your friends on the weekend. By drinking too much, you'll come off as unprofessional and you may be labeled as uncommitted to the company. It may also lead you to saying things that you shouldn't say, and it can even be dangerous if you choose to drive home afterwards. Avoiding the consumption of alcohol altogether is the best bet, but if the situation presents itself, exercise a little self control and minimize the number of drinks you have.
3. Business Etiquette Mistake #3: No Table Manners: People are often intimidated by business dinners at fancy restaurants, but if you keep just a few basic rules in mind, you'll eloquently survive any meal. Start with learning what silverware to use. In general, start from the outside and work in, saving the fork and spoon at the top of your plate for dessert. The ladies at your table should be served first, but even if they aren't, wait until everyone at the table has their food before you begin eating. Of course, keep you napkin on your lap, and thank a server who refills your glass.
4. Business Etiquette Mistake #4: Forgetting Your Manners During Emails: As communication technology changes, there are more and more business etiquette rules to keep in mind. One of the biggest mistakes the people make in regards to business etiquette is writing emails that are too casual or inappropriate. Today, email is the communication method of choice, whereas once paper memos were sent. When you're writing any email, use care to keep it professional and polite. In fact, you should think of an email as you would a typical letter. Always address it to the person receiving the email, use proper grammar and spelling, and close with your full name and contact information. In addition, avoid using your office email to send other in the office funny, cute, sentimental, personal or chain emails. If you want to send these kinds of emails, get a free Yahoo!, Google, or MSN email account and use that. Your company email should only be used for professional purposes, like sending memos or asking questions about work-related projects.
5. Business Etiquette Mistake #5: Being Too Casual With Superiors: Lastly, one of the worst - if not the worst - business mistakes you can make is treating your superiors as friends. While some bosses and employees become very close, this is not the rule, and you should always treat your relationship as one that is strictly for business. Do not call someone by his or her first name until prompted to do so, and do not assume that you can take liberties without asking permission, even if it was not a problem in the past. The key is professionalism. Recognize how you're like to be treated were you the boss, and show your superiors that same respect. And who knows? If you avoid this top five business etiquette mistakes, you might actually be that boss someday!
Tuesday, February 24, 2009
Is Pub Culture really destroying the fabric of Indian Culture ?
From the blog of Shekhar Kapur, the oscar winner for "Elizabeth: the Golden Age'":::
Excuse me, but where does this moral culture really exist, except in the fantasies of those that the media are hyping up as India's moral brigade. In the small towns and villages of India ??? Where 10 times more women are raped and molested, abused, physically assaulted and mutilated for the mere crime of being a woman or a low caste ! There is no pub culture there. But there is a huge problem of alcoholism nevertheless.
Where young men are killed and hanged and young women are killed by their own families just because they fell in love and wanted to marry out of their caste. There is no pub culture there.
Alcoholism is a problem. No doubt. But there is more alcohol related domestic abuse against women in India by their husbands in their own homes than anywhere else. If any of the supporters of the moral policing would just care to g to one of the shelters for domestically abused women, they will know that the real problem with alcohol is not in the pub culture but at home.
And if India is progressing towards a country where men and women stand equal in jobs, status and financial independence, where we have had women as our Prime Ministers, Chief Ministers, and Cabinet Ministers, then why should men and women be treated as any different ? If drinking alcohol in a pub is immoral for a woman, they why is it morally OK for a man ?
I have seen too many families destroyed by alcoholism to be able to make a stand for excessive drinking. So what should one do ? Ban alcohol ? Lets get real. the very people who form the moral brigade will probably not go for that. Corrupt pockets are fed with that. State coffers rely on taxes on alcohol. And banning alcohol merely drives it underground, and gives the underworld goons a god sent opportunity to make money. Tourism collapses.
There must be checks and balances. But the answer is NOT to target the physically weaker sections of our people. Women. That is not moral policing. It is sheer cowardice.
And I cannot understand why the Chief Minister of Rajasthan has a problem with a girl and a boy holding hands ? He does not seem to have such a problem when the same hand raises itself in violence rather than affection.
Thursday, February 19, 2009
For Prelims
1. Who has been officially declared as the new CM of Maharashtra after Vilas Rao Deshmukh stepped down in wake of Mumbai terror attacks?
A. Narayan Rane
B. Sushil Kumar Shinde
C. Balasahib Vikhe Patil
D. Ashok Chavan
2. Who has recently become the second Indian woman to achieve the feat of breaking into the top 10 in the latest Badminton World Federation rankings?
A. Sania Nehwal
B. Madhumita Bisht
C. Shambhavi Bajaj
D. Aparna Popat
3. The prestigious United Nations Prize in the Field of Human Rights for 2008 has been given to seven people including
A. Sania Nehwal
B. Benazir Bhutto
C. Sister Dorothy Stang
D. Both B & C
4. India has recently signed a nuclear and space deal with
A. US
B. Russia
C. China
D. Taiwan
5. The author to win Booker Prize this year for his debut novel is
A. Kiran Desai
B. Salman Rushdie
C. Aravind Adiga
D. Arundhati Roy
6. IBSA stands for
A. India, Brazil and South Africa
B. International board of System Analysts
C. Indiana Baptist State Association
D. International Blind Sports foundation
7. The Muslim organization recently banned by the UN for being a terrorist outfit is
A. LeT
B. LTTE
C. Jamat-e-Dawa
D. Hizbul Mujahideen
8. Which among the following states does not have a legislative assembly of its own?
A. Goa
B. Mizoram
C. Punjab
D. Andaman & Nicobar Islands
9. The sand and rock bridge between India and Sri Lanka is known as
A. Howrah bridge
B. Adam’s bridge
C. Pamban Bridge
D. Mattancherry Bridge
10. Official residence of President of France is
A. Elysee Palace
B. Kremlin Palace
C. Topkapi Palace
D. The Palace of Grand Duke Nicolai
11. ‘AUROVILLE’ is
A. A Palace constructed in the memory of Aurobindo Ghosh
B. An Indian community center in New York
C. A garden housing newly developed hybrid plant varieties
D. World’s first international town sponsored by UNESCO
12. Bihu is the dance form of which state?
A. Assam
B. Sikkim
C. Meghalaya
D. Arunachal Pradesh
13. Who coined the word ‘asassination’?
A. Shakespeare
B. Rabindranath Tagore
C. Bernard Shah
D. Abraham Lincoln
14. World human rights day falls on?
A. December 1
B. December 10
C. December 17
D. December 19
15. Which vitamin will be lost while cooking?
A. A
B. B
C. C
D. D
16. In which year was the first modern Olympics conducted?
A. 1892
B. 1896
C. 1902
D. 1894
17. The World Environment Day is observed on the
A. 6th June
B. 5th June
C. 1st Dec
D. 10th Dec.
18. Name this Indian Tennis player who has turned Hollywood filmmaker?
A. Leander Paes
B. Mahesh Bhupathi
C. Vijay Amritraj
D. Ashok Amritraj
19. Who was the 1st ODI captain for India?
A. Ajit Wadekar
B. Bishen Singh Bedi
C. Nawab Pataudi
D. Vinoo Mankad
20. When was the first cricket Test match played?
A. 1873
B. 1877
C. 1870
D. 1788
21. India is the world's leading producer of this mineral...?
A. Gold
B. Silver
C. Mica
D. Iron
22. Which one of the following correctly describes AGNI ?
(A) A fighter plane
(B) A versatile tank
(C) A long-range missile
(D) A long-range gun
23. Which of the following companies of Indian origin has been placed amongst the World's seven Best Firms in Financial Sector ?
(A) IDBI Bank
(B) HDFC Bank
(C) Bajaj Capitals
(D) ICICI Bank
24. Who has been recently appointed as the ONGC Chairman?
A. R.S. Sharma
B. Subir Raha
C. Bimal Jalan
D. G.N. Bajpai
25. Which of the following countries is not a member of the SAARC?
A. China
B. India
C. Sri Lanka
D. Pakistan
26. Who alongwith Bill gates co-founded MicroSoft?
A. Steve Ballmer
B. Paul Allen
C. Jerry Yang
D. Steve Jobs
27. Who is the ISRO chief?
A. G Madhavan Nair
B. APJ ABDUL KALAM
C. L AIyyanga Nair
D. Ramakrishna Sharan
28. Who is the Chairperson of IIM Ahmedabad?
A. Vijaypat Singhania
B. NR NarayamMurthy
C. Bakul Dholakia
D. Arjun Kumar
29. Which company acquired the assets of Kinetic Motor Co. earlier last year?
A. Tata Motors
B. LML Motors
C. Mahindra &Mahindra
D. TVS Motor Vehicles
30. AOL stands for...
A. Arranged Outer Line
B. America Over LAN
C. Audio Over LAN
D. America Online
31. Which of the following places are known as the "Emerald Islands"?
A. Lakshadweep Islands
B. Daman & Diu
C. Maldives
D. Andaman & Nicobar Island
32. Rabindra Nath Tagore composed the National Anthem of?
A. India
B. India, Bangladesh and Nepal
C. India and Bangladesh
D. Bangladesh
33. Which former Indian President died as a result of a road accident?
A. R.Venkatraman
B. Rajendra Prasad
C. Faqruddin Ali Ahmed
D. Giani Zail Singh
34. What scientist discovered the radioactive element radium?
A. Isaac Newton
B. Albert Einstein
C. Benjamin Franklin
D. Marie Curie
35. Name the oldest mountain range of India...?
A. Himalayas
B. Nilgiris
C. Aravallis
D. Vindhyas
36. In Hindu mythology, who is the god of death?
A. Indra
B. Sarswati
C. Yama
D. Brahma
37. Which are three 'mukhupdesh' of Guru Nanak Sahib Ji ?
A. Kirt Karni,Naam Japna,Wand Chaakna
B. Kirt Karni,Naam Japna,Langar Chaakna
C. Mehnat Karni,Naam Japna,Wand Chaakna
D. Kirt Karni,Gurdwara jana,Wand Chaakna
38. Who among the following is the author of the book "Unaccustomed Earth" ?
A. Shobha De
B. Arundhati Roy
C. A. P. J. Kalam
D. Jhumpa Lahiri
39. The 6th Pravasi Bharatiya Divas-2008 was held in?
A. New Delhi
B. Mumbai
C. Bengalaru
D. Lucknow
40. What is the objective of eleventh Five Year plan (2007-12) ?
(a) Removal of Unemployment
(b) Inclusive growth
(c) Growth with social- justice
(d) Development of minorities
Answers:::
1) D
2) A
3) D
4) B
5) C
6) A
7) C
8) D
9) B
10) A
11) D
12) A
13) D
14) B
15) C
16) B
17) B
18) D
19) A
20) B
21) C
22) C
23) b
24) a
25) a
26) b
27) a
28) a
29) c
30) d
31) d
32) c
33) d
34) d
35) c
36) c
37) a
38) d
39) a
40) b
A. Narayan Rane
B. Sushil Kumar Shinde
C. Balasahib Vikhe Patil
D. Ashok Chavan
2. Who has recently become the second Indian woman to achieve the feat of breaking into the top 10 in the latest Badminton World Federation rankings?
A. Sania Nehwal
B. Madhumita Bisht
C. Shambhavi Bajaj
D. Aparna Popat
3. The prestigious United Nations Prize in the Field of Human Rights for 2008 has been given to seven people including
A. Sania Nehwal
B. Benazir Bhutto
C. Sister Dorothy Stang
D. Both B & C
4. India has recently signed a nuclear and space deal with
A. US
B. Russia
C. China
D. Taiwan
5. The author to win Booker Prize this year for his debut novel is
A. Kiran Desai
B. Salman Rushdie
C. Aravind Adiga
D. Arundhati Roy
6. IBSA stands for
A. India, Brazil and South Africa
B. International board of System Analysts
C. Indiana Baptist State Association
D. International Blind Sports foundation
7. The Muslim organization recently banned by the UN for being a terrorist outfit is
A. LeT
B. LTTE
C. Jamat-e-Dawa
D. Hizbul Mujahideen
8. Which among the following states does not have a legislative assembly of its own?
A. Goa
B. Mizoram
C. Punjab
D. Andaman & Nicobar Islands
9. The sand and rock bridge between India and Sri Lanka is known as
A. Howrah bridge
B. Adam’s bridge
C. Pamban Bridge
D. Mattancherry Bridge
10. Official residence of President of France is
A. Elysee Palace
B. Kremlin Palace
C. Topkapi Palace
D. The Palace of Grand Duke Nicolai
11. ‘AUROVILLE’ is
A. A Palace constructed in the memory of Aurobindo Ghosh
B. An Indian community center in New York
C. A garden housing newly developed hybrid plant varieties
D. World’s first international town sponsored by UNESCO
12. Bihu is the dance form of which state?
A. Assam
B. Sikkim
C. Meghalaya
D. Arunachal Pradesh
13. Who coined the word ‘asassination’?
A. Shakespeare
B. Rabindranath Tagore
C. Bernard Shah
D. Abraham Lincoln
14. World human rights day falls on?
A. December 1
B. December 10
C. December 17
D. December 19
15. Which vitamin will be lost while cooking?
A. A
B. B
C. C
D. D
16. In which year was the first modern Olympics conducted?
A. 1892
B. 1896
C. 1902
D. 1894
17. The World Environment Day is observed on the
A. 6th June
B. 5th June
C. 1st Dec
D. 10th Dec.
18. Name this Indian Tennis player who has turned Hollywood filmmaker?
A. Leander Paes
B. Mahesh Bhupathi
C. Vijay Amritraj
D. Ashok Amritraj
19. Who was the 1st ODI captain for India?
A. Ajit Wadekar
B. Bishen Singh Bedi
C. Nawab Pataudi
D. Vinoo Mankad
20. When was the first cricket Test match played?
A. 1873
B. 1877
C. 1870
D. 1788
21. India is the world's leading producer of this mineral...?
A. Gold
B. Silver
C. Mica
D. Iron
22. Which one of the following correctly describes AGNI ?
(A) A fighter plane
(B) A versatile tank
(C) A long-range missile
(D) A long-range gun
23. Which of the following companies of Indian origin has been placed amongst the World's seven Best Firms in Financial Sector ?
(A) IDBI Bank
(B) HDFC Bank
(C) Bajaj Capitals
(D) ICICI Bank
24. Who has been recently appointed as the ONGC Chairman?
A. R.S. Sharma
B. Subir Raha
C. Bimal Jalan
D. G.N. Bajpai
25. Which of the following countries is not a member of the SAARC?
A. China
B. India
C. Sri Lanka
D. Pakistan
26. Who alongwith Bill gates co-founded MicroSoft?
A. Steve Ballmer
B. Paul Allen
C. Jerry Yang
D. Steve Jobs
27. Who is the ISRO chief?
A. G Madhavan Nair
B. APJ ABDUL KALAM
C. L AIyyanga Nair
D. Ramakrishna Sharan
28. Who is the Chairperson of IIM Ahmedabad?
A. Vijaypat Singhania
B. NR NarayamMurthy
C. Bakul Dholakia
D. Arjun Kumar
29. Which company acquired the assets of Kinetic Motor Co. earlier last year?
A. Tata Motors
B. LML Motors
C. Mahindra &Mahindra
D. TVS Motor Vehicles
30. AOL stands for...
A. Arranged Outer Line
B. America Over LAN
C. Audio Over LAN
D. America Online
31. Which of the following places are known as the "Emerald Islands"?
A. Lakshadweep Islands
B. Daman & Diu
C. Maldives
D. Andaman & Nicobar Island
32. Rabindra Nath Tagore composed the National Anthem of?
A. India
B. India, Bangladesh and Nepal
C. India and Bangladesh
D. Bangladesh
33. Which former Indian President died as a result of a road accident?
A. R.Venkatraman
B. Rajendra Prasad
C. Faqruddin Ali Ahmed
D. Giani Zail Singh
34. What scientist discovered the radioactive element radium?
A. Isaac Newton
B. Albert Einstein
C. Benjamin Franklin
D. Marie Curie
35. Name the oldest mountain range of India...?
A. Himalayas
B. Nilgiris
C. Aravallis
D. Vindhyas
36. In Hindu mythology, who is the god of death?
A. Indra
B. Sarswati
C. Yama
D. Brahma
37. Which are three 'mukhupdesh' of Guru Nanak Sahib Ji ?
A. Kirt Karni,Naam Japna,Wand Chaakna
B. Kirt Karni,Naam Japna,Langar Chaakna
C. Mehnat Karni,Naam Japna,Wand Chaakna
D. Kirt Karni,Gurdwara jana,Wand Chaakna
38. Who among the following is the author of the book "Unaccustomed Earth" ?
A. Shobha De
B. Arundhati Roy
C. A. P. J. Kalam
D. Jhumpa Lahiri
39. The 6th Pravasi Bharatiya Divas-2008 was held in?
A. New Delhi
B. Mumbai
C. Bengalaru
D. Lucknow
40. What is the objective of eleventh Five Year plan (2007-12) ?
(a) Removal of Unemployment
(b) Inclusive growth
(c) Growth with social- justice
(d) Development of minorities
Answers:::
1) D
2) A
3) D
4) B
5) C
6) A
7) C
8) D
9) B
10) A
11) D
12) A
13) D
14) B
15) C
16) B
17) B
18) D
19) A
20) B
21) C
22) C
23) b
24) a
25) a
26) b
27) a
28) a
29) c
30) d
31) d
32) c
33) d
34) d
35) c
36) c
37) a
38) d
39) a
40) b
Friday, February 13, 2009
Entrepreneur or Business Owner - What is the Difference
Are you a business owner or an entrepreneur? The difference between the two is more of a mindset. Let’s look at Aaron and Kyle, twin brothers who start a family restaurant, as an example.
The Business Opens
Kyle has an idea for a family restaurant he’d like to open. He’s done all the background work, figured out the business plan and is all set, except for the initial funding. His brother, Aaron, is a physician at the hospital. He’s been looking for some place to invest a bit of money and is willing to invest in the restaurant and allow his brother to take care of running it. They agree on details and the restaurant is opened. Unfortunately another family restaurant opens within a week on the same block. Both restaurants are struggling to stay afloat.
Kyle
Kyle has spent years planning for this restaurant. It is his dream and he has been spending sixteen hours a day there. He’s hired the best cooks and even dons an apron himself from time to time to see that his customers are happy. He wants this restaurant to succeed. As he sees it losing money daily, his thoughts turn to what he can do to make his restaurant stand out above the other one. Failure is not an option in his eyes.
Aaron
Aaron’s accountant comes to him concerned over the money he is losing on his investment. Aaron talks with his brother, explaining he had expected to profit from his investment. Aaron tries to convince Kyle to either close down the restaurant or change the focus so it is not in direct competition with the other family restaurant. He can’t understand why his brother would want to hold onto a failing business.
The Difference
Kyle is a business owner and Aaron is an entrepreneur. It doesn’t mater which individual does the actual day-to-day running of the business. The significant difference between a business owner and an entrepreneur is where their emotional investment is. A business owner wants the business to succeed. He will do everything he can to bring about this success. He won’t consider changing to another product. On the other hand, an entrepreneur wants to succeed. He doesn’t care what product or service will achieve this goal and is always willing to consider a complete different direction should one direction prove unsuccessful. Do you want your business to succeed or do you want to succeed?
This is what determines the answer to whether you are a business owner or an entrepreneur.
http://physicianentrepreneur.com/?p=565
Wednesday, February 11, 2009
Current Statistics for GD
11 Feb 2009: Govt infuses Rs 3,800 crore in 3 banks to raise capital adequacy.
BUSINESS WITH DIFFERENT COUNTRIES:::
South Africa - $6.2 billion trade
BUSINESS WITH DIFFERENT COUNTRIES:::
South Africa - $6.2 billion trade
Static Statistics for GD
INDIA:::
Population aged 65+: 6,16,52,80,000 (6.16 Cr)
GDP growth (% growth) - 7.3
Annual rates of inflation (%) - 8.38
Tourism receipts (US$ million) - 11,151
Population aged 65+: 6,16,52,80,000 (6.16 Cr)
GDP growth (% growth) - 7.3
Annual rates of inflation (%) - 8.38
Tourism receipts (US$ million) - 11,151
- India spends 1.2% of its GDP on health
- India emerges 2nd in medical tourism race. In 2007, Indian hospitals treated 4.5 lakh patients from other countries against topper Thailand's 12 lakh. - Deloitte
Wednesday, February 4, 2009
Foreign Recipients of Nishan-e-Pakistan
- Queen Elizabeth II, 1960
- Hu Jintao, 24 Nov, 2006
- King Abdullah bin Abdul Aziz Al Saud, 1 Feb, 2006
- Morarji Desai, 19 May, 1990
- His Highness Prince Karim Aga Khan, 23 Mar, 1983
- Richard Nixon, 1 August, 1969
- Dilip Kumar, 1997
- Dwight Eisenhower
Where Real Innovation Happens
Came across an article published by Forbes. It really penetrates deep into the real thing of entrepreneurship. "Don't look for the gilded road to fortune. Look for passion."A perfect example of creating ur own path than to follow one.
Forget Silicon Valley. Traditional wisdom is that it represents the model for American innovation: a hotbed of young entrepreneurs with easy access to capital from a large pool of savvy investors.
Forget Silicon Valley. Traditional wisdom is that it represents the model for American innovation: a hotbed of young entrepreneurs with easy access to capital from a large pool of savvy investors.
Think again: The World Wide Web was started by Englishman Tim Berners-Lee because he was frustrated with how hard it was to share information at CERN, the huge physics lab in Switzerland where he worked. Linux was developed by a Finnish college student who wrote the operating system "just for fun" and is only one example of thousands of open-source software projects begun around the world by people who were writing software to "scratch their own itch" and giving it away for free. Even the personal computer revolution, which took root in Silicon Valley, began with a bunch of hobbyists at the Homebrew Computer Club.
It turns out that many of the great waves of creative destruction that have reinvented Silicon Valley didn't start there. More important, they didn't even start with the profit motive.
Rather, they started with interesting problems and people who wanted to solve them, exercising technology to its fullest because exploring new ideas was fun.
I call these people "alpha geeks." They are smart enough to make technology do what they want rather than what its originator expected. The alpha geeks exercise an idea or a gadget, pushing it past its current limits, reinventing it and eventually paving the way for entrepreneurs who figure out how to create mainstream versions of their novel ideas.
I've watched this process now for better than 30 years as a computer book publisher, conference producer, technology activist and early-stage investor. I learned early on that many of the innovations behind my best-selling books weren't coming from companies but from individuals. Their ideas spread through a grassroots network of early adopters and tinkerers long before entrepreneurs and investors appeared on the scene to figure out how to make money from the idea.
The Internet developed in this early adopter Petri dish for more than 15 years before entrepreneurs and venture capitalists clicked on their first e-mail. I was publishing books on free and open-source software in the mid-1980s; Silicon Valley didn't get the open-source message till 1998.
Even recent venture booms, like the one around Web 2.0, a concept that my company popularized in 2004 to remind people that the Web had continued to evolve after the dot-com bust of 2001, missed the story till it was well underway. Key ideas and projects were born during the years when investors had given up on the Web. Only developers driven by a strong personal vision kept at it.
So where's the alpha-geek innovation happening today?
I see it bubbling up in areas like manufacturing, open-source hardware, sensor networks and robotics.
Yes, there are start-ups in these areas, but, more important, there's an enthusiast boom. The Maker Faire, an event O'Reilly Media launched in 2006 to celebrate the people playing at the interface of digital technology and the physical world, last year drew 65,000 attendees, including many families, to view the work of the 500 exhibiting "makers."
Or consider synthetic biology, where high school students are exploring the frontiers through events like the International Genetically Engineered Machines competition. When high-schoolers are doing genetic engineering, you know the future holds some big surprises!
We see innovators working from the outside to put flesh on the vision of government transparency articulated by the Obama administration. Software "hacks," like chicagocrime.org, one of the first Google Maps mash-ups, are becoming a prototype for how government data can be turned into new consumer services by start-ups like everyblock.com.
Tools for investigative journalism put together by nonprofits like the Sunlight Foundation presage the work of start-ups like Apture and Evri. And of course it's hard to ignore the fact that tools for grassroots activism, born out of political enthusiasm by a few "hackers" working for Howard Dean in 2004, turned into real products that helped win the national election only four years later.
How about the energy crisis? Yes, some of Silicon Valley's biggest investors are going after this opportunity. But even here, serendipity and personal curiosity play an unexpected role.
Consider Greenbox, a start-up founded by Jonathan Gay, one of the creators of the ubiquitous Flash technology for online video and animation. After retiring following the acquisition of Macromedia by Adobe
So don't follow the money. Follow the excitement. The people inventing the future are doing so just because it's fun.
Tim O'Reilly is the founder and CEO of O'Reilly Media, thought by many to be the best computer book publisher in the world. O'Reilly Media also hosts conferences on technology topics. Tim's blog, the O'Reilly Radar, "watches the alpha geeks" and serves as a platform for advocacy about issues of importance to the technical community. He can also be found as @timoreilly on Twitter.
Tuesday, January 27, 2009
Sub-prime Mortgage Crisis
Right, starting with the term ‘sub-prime mortgage’. Mortgage refers to loans given to borrowers. Every bank has certain Prime customers. These are the customers to whom the bank ‘wants’ to give home loans to. The reason for this is the high credit ratings these customers have (Credit rating refers to how the banks perceive the ability of the borrower to return the loans with interest. A customer with high credit rating is someone who is deemed to be likely to return the money, based on his record of past borrowings, as well as public image and various other factors). Hence, it is preferable for the banks to loan these people the money. They also give them lower interest rates compared to other customers.
Now, recently, the banks had a lot of money in terms of liquid assets (non-fixed assets, usable cash) available to them. A combination of low interest rates (which reduced defaults) and large capital inflows from outside the U.S. (booming trade) created a surplus of ‘loanable’ liquid assets with the banks. So, now they wanted to loan this money as well. The problem was, that the prime customers were very few in number, and given the large number of banks, no bank was able to loan its entire cash to prime customers.
Hence, the investment banks had to shift to non-prime customers, technically called as sub-prime customers. These are people with less than desirable credit ratings. But still, the banks had to give out loans. For that, they started attracting these people with better interest rates (better implies lower rates), as well as relatively very easy payback options (Initially, I thought why the banks couldn’t sit tight with their money instead of taking high risks. But then, I realized that even if one investment bank comes out with such offers, the other banks are practically forced to do the same, otherwise they will be ripped off all their business to the other bank with supposedly better offers).
Also, in those years, the housing prices in the U.S. shot upwards. So, the people started to consider real estate as a viable investment option. They would buy the houses with loans and then expect the prices to shoot up. The plan was, when the price was sky-high, they would sell the property, pay off the debt and walk away with a handy sum of profit. The other option was refinancing in a few years time (Refinance implies, when the property for which I have taken a loan has increased in value, I would approach my lender to simplify my loan conditions, make the payment options easier for me, since my property has increased in value).
Herein lies the problem. As the number of customers getting home loans and investing into new, unoccupied homes shot upwards, it resulted into a surplus of available houses. By conventional rules of demand and supply, this led to a reduction in the demand, and hence a dip in the housing prices. The real estate prices stopped rising, and instead started declining.
Now consider a scenario, I bought a house for $120,000, initially paying all the installments diligently on time. After some time the prices started to fall. Now, 12 months down the line, I realize that my loan amount pending is $100,000 and the current value of my house is $75,000. So now I have an incentive to simply walk away from the home. Let the lenders possess the home and do whatever they want with it. At least I will save some of my investments. This is especially a possible situation given that the housing prices fell drastically and the loans were given to sub-prime customers who already have low credit rating. Hence, the number of defaults on loans increased, the banks did not even get their principal of the lent sums back, leave alone the interest. This caused a major problem with the banks with regard to available cash and liquidity.
It was this lack of available cash that caused the major chunk of problems with the U.S. financing system, causing problems with larger-than-life banks like Merrill-Lynch, AIG etc. (The bigger the bank, the more the amount loaned, the more the default, the more will be the amount lost, hence the biggest banks were strongly affected)
Now, recently, the banks had a lot of money in terms of liquid assets (non-fixed assets, usable cash) available to them. A combination of low interest rates (which reduced defaults) and large capital inflows from outside the U.S. (booming trade) created a surplus of ‘loanable’ liquid assets with the banks. So, now they wanted to loan this money as well. The problem was, that the prime customers were very few in number, and given the large number of banks, no bank was able to loan its entire cash to prime customers.
Hence, the investment banks had to shift to non-prime customers, technically called as sub-prime customers. These are people with less than desirable credit ratings. But still, the banks had to give out loans. For that, they started attracting these people with better interest rates (better implies lower rates), as well as relatively very easy payback options (Initially, I thought why the banks couldn’t sit tight with their money instead of taking high risks. But then, I realized that even if one investment bank comes out with such offers, the other banks are practically forced to do the same, otherwise they will be ripped off all their business to the other bank with supposedly better offers).
Also, in those years, the housing prices in the U.S. shot upwards. So, the people started to consider real estate as a viable investment option. They would buy the houses with loans and then expect the prices to shoot up. The plan was, when the price was sky-high, they would sell the property, pay off the debt and walk away with a handy sum of profit. The other option was refinancing in a few years time (Refinance implies, when the property for which I have taken a loan has increased in value, I would approach my lender to simplify my loan conditions, make the payment options easier for me, since my property has increased in value).
Herein lies the problem. As the number of customers getting home loans and investing into new, unoccupied homes shot upwards, it resulted into a surplus of available houses. By conventional rules of demand and supply, this led to a reduction in the demand, and hence a dip in the housing prices. The real estate prices stopped rising, and instead started declining.
Now consider a scenario, I bought a house for $120,000, initially paying all the installments diligently on time. After some time the prices started to fall. Now, 12 months down the line, I realize that my loan amount pending is $100,000 and the current value of my house is $75,000. So now I have an incentive to simply walk away from the home. Let the lenders possess the home and do whatever they want with it. At least I will save some of my investments. This is especially a possible situation given that the housing prices fell drastically and the loans were given to sub-prime customers who already have low credit rating. Hence, the number of defaults on loans increased, the banks did not even get their principal of the lent sums back, leave alone the interest. This caused a major problem with the banks with regard to available cash and liquidity.
It was this lack of available cash that caused the major chunk of problems with the U.S. financing system, causing problems with larger-than-life banks like Merrill-Lynch, AIG etc. (The bigger the bank, the more the amount loaned, the more the default, the more will be the amount lost, hence the biggest banks were strongly affected)
Sunday, January 18, 2009
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