With recent responsibilities, I have taken the resolution to take my finances more seriously (sadly, which I have never!). With this, I have opened one more joint bank  account, applied for a joint credit card and this time, have not got with any pre-approved offers but selecting from couple of choices available. Thanks to my in-time credit card payments !

Honestly, being in US on working visa doesn’t leave much of a scope to have long term house mortgage but still there are other small loans, that I may need from time to time e.g. auto-loan. Everyone knows that we should maintain good credit score and it pays but after that things are blurred, confusing and facts are unknowns, if not to all then to most of them.

There are several kinds of credit cards available in the market based on cash back, fees, points, interest rates, balance transfers, other benefits. While there is no defined rule which is the best credit card for one, you should always check your needs and priorties of credit card e.g. I always pay my credit card bills on time, have a separate savings account to check unwanted events in life and thus don’t need a 0% balance transfer card, howsoever tempting the offer is. Similarly, even if there is a credit card that matches your needs, always ensure that you read the disclosures properly.

Your credit card is more important than you think . Apart from all the well known facts like you’ll get number of benefits like cash-back, free travel and hotel points, auto rental insurances , maintaining a good credit will invariably get you a loan with the low interest, quick processing of applications etc, there are several other facts too.

I was checking some report on MSN money, how a bad credit report might cost you a job and seriously affect your job hunt. Although I believe that this is overblowing credit score but this is the reality which we can’t deny. These days many companies have started checking the credit report (unfortunately, this is legal too!) and can deny a job outright based on bad credit report. Even though, I maintain a good credit score but I never know when some such thing happens when I have to squeeze my credit card and could not pay the bills in time, some medical emergency, it can be anything. While companies believe that bad credit scorers are poor decision makers in life and so is the probability of their cheating and theft with the company, I could not really coorelate this, but let that be altogether different discussion. Bottom line is bad credit report might cost you your job (if your company is looking for an excuse to fire you or is under financial stress!) and may dent your job-hunt.

Insurance rates are other major things for which you should maintain good credit score. I know that house mortgages companies are using them and so is perhaps auto-insurers. You have to pay a higher insurance quote if you have a bad credit past. I am not sure, what is dwelled in the future : more  electricity bills, phone bills because you could not pay your last bill on time !

I don’t know how many of us really care about credit score if we are in States for a shorter term (perhaps you can manage even without that !) but if you need financing here then you really need to be careful and maintain it. For long term aliens and even US citizens, it’s an absolute must. Another grimly funny thing is several out-of-the-box advices like going bankrupt from so many credit counsellors and debt relief programs, I really can’t start how bad the ideas are and you should not try this if there is any last hope. I have already quoted  one bad aspect above and ie difficult job hunting time. Rest in next post …

Photo credit: Jene

It’s perhaps more than 3-4 years since I have read Ayn Rand’s ‘Fountainhead‘ and ‘Atlas Shrugged‘ and while it takes me time to recollect even the subject names that I have studied during my MBA days, forget about the course books and content, I can very well recall many speeches, especially the huge one on Objectivism and plot-line of the books. But yeah, I am not special as ‘Atlas Shrugged’ has claimed the title of Second most influential book after Bible and has been moving People’s life since last many years.

However, the book’s popularity has surged last year with Ayn Rand as one of the most selling and popular author of 2008 and perhaps of 2009 too with bigger numbers. I have been huge Rand fan and blogged my state of mind in one of the old posts. If she is true, practical and can be followed or not, can be big discussion point, but everyone will agree that she is fascinating. And perhaps this fascination has caught the people’s attention in this turmoil times.

The Ayn Rand Institute attribute the growth in book sales with the astonishing similarity in the events that takes place in the book and in our real life, now-a-days. This is unprecedent Economic crises with many businesses already bankrupt while other on the brink of that. The government is coming with one after other economic reforms and policies like interest rate cuts, bailouts and Stimulus bill, Healthcare reforms, having TARP in place etc etc which is very similar to the whims and government intervention in the ‘Atlas Shrugged’.

If you have not read the book and wondering what all I am writing, then book’s plot is about the strike of the entrepreneurs who decided that it’s no more worth to produce goods and services in this government which would bizzarely tax and seize their wealth to distribute among the inept, greedy, failure business persons and politicians on the name of equality and fairness. They start disappearing one after another, with economy sinking each passing day and government coming up with one after another policies which all lead to vain. It’s a spiral downturn, the more government wish to regulate, the worse it gets.  Finally, it was all despair and gloom and the government pleads John Galt,  the movement leader to save them. There are many funny regualation imposed by the government in the book like ‘Anti-Greed’ Act, ‘Equalization of Opportunity’ Act and to quote my personal favorite ‘Anti-dog-eat-dog’:

The Rule provided that the members of the National Alliance of Railroads were forbidden to engage in practices defined as ‘destructive competition’; that in regions declared to be restricted, no more than one railroad would be permitted to operate . . . [and] that the Executive Board of the National Alliance of Railroads was empowered to decide, at its sole discretion, which regions were to be restricted.

The Us budget deficit has already crossed 1.5 trillion dollars which would  soon surpass 2.5 trillion under Obama’s regime. Obama might be a real life hero but in the sequence of events, he would be charming and intelligent villian, solely responsible for spoiling the economy. With immigration reforms, making things difficult for talented international pool to one after another bail-outs and government fundings to the incompetent and beleagured insurance companies, investment banks, automobile companies, Obama’s doing all the wrong things. With every wrong bail-out, the geniune hard worker tax payer’s money is lost, causing frustration. The stronger who have managed to sail through the tide are capped while incompetents are promoted. Atlas Shrugged talks on abolishing the income tax, zeroing the government intervention in economic affairs while US govt is busy doing the exact opposite.

I have read somewhere that when one of the Ayn Rand’s institute director has been told that a movie is being launched on the book, he or she chuckled that a movie is not needed, for we are having it live in our real lives. I am not sure but are the Manhattan skyscrapers lights going to switch off ?

Photo Credit: stuckincustoms

During my regular internet surfing, I stumble upon an interview of Warren Buffet at CNBC where he is criticizing Apple for hiding the serious illness of Steve Jobs and that he did a liver transplant couple of months back.

If I have any serious illness, or something coming up of an important nature, an operation or anything like that, I think the thing to do is just tell the American, the Berkshire shareholders about it.  I work for ‘em.  Some people might think I’m important to the company.  Certainly Steve Jobs is important to Apple.  So it’s a material fact.  Whether he is facing serious surgery or not is a material fact.  Whether I’m facing serious surgery is a material fact.  Whether (General Electric CEO) Jeff Immelt is, I mean, so I think that’s important to get out.  They’re going to find out about it anyway so I don’t see a big privacy issue or anything of the sort.

I agree to Mr Buffet that hiding such serious illness has been wrong and unethical at Apple’s part towards its customers and shareholders. It’s OK that you don’t share every other detail with the stock exchanges or the shareholders but when your CEO and that too as colossal as Steve Jobs is seriously ill then you need to communicate. Who knows if  I am investing in Apple because of Steve and don’t have any faith in Apple’s product line or whatever innovative practices they say that they follow.

It’s not hidden from anyone that how fair has the Apple been doing before Jobs has been brought back to Business. It was full of problems, there were no innovations and rapidly digressing from it’s own vision. Steve is Apple and I would be sad if he doesn’t take quick and effective steps for his succession. Wish that Apple should not face the same as Disney faced after Walt ?

Regards,

Pawan

Photo Credit: nziet

Like every second IT guy, I manage to get lot of email forwards, many of which I delete without even having a look but this forward from Tanay caught my attention. Fine, it’s an anecdote and things are not this simple but I couldn’t resist the temptation to post this :- )

Actual Source: Unknown

============

It is August. In a small town on the South coast of France, holiday season is in full swing.  But it is raining so there isn’t too much business happening.
 
Everyone is heavily in debt.
 
Luckily, a rich Russian tourist arrives in the foyer of the small local hotel. He asks to see a room and puts a Euro100 note on the reception counter, takes a key and goes to inspect the room located up the stairs on the second floor.
The hotel owner takes the note in hurry and rushes to his meat supplier to whom he owes E100.

The butcher takes the money and races to his wholesaler to pay his debt.
 
The wholesaler rushes to the farmer to pay E100 for goats he purchased some time ago.
 
The farmer triumphantly gives the E100 note to a local prostitute who gavehim her services on credit.
 
The prostitute goes quickly to the hotel, as she owes the hotel for her room use to entertain clients..  She pays the hotel owner.
 
At that moment, the rich Russian comes down to the reception and informs the hotel owner that the proposed room is unsatisfactory and takes his E100 back and departs.
 
There was no profit or income. But everyone no longer has any debt and the small town people look optimistically towards their future.

Regards,

PV

The foundation of this post has been laid in the afternoon after there has been a forward on one of the bakar threads and it has been satirically replied by Rajiv. The forward was regarding support to Indian goods and boycott foreign products and unusually, a non-sense thread got some good view points.

Globalisation has been mostly hated in developing nations on the notion that rich nations and companies are spreading a colonial regime, utilizing poor nation’s resources, manpower and buying power (countries like India/China). There are lot of pamphlet circulations, e-Mail chains to support these causes with examples like Coke price being of 60P while its being sold at Rs. 9 etc. I agree, but would you wonder if i say that Coke is the dream marketing company of world’s best B grade student? Here product is secondary and how’s that being sold is more important and this conundrum reflects in the cost too. Some pretty basic Business funda. A very layman’s example to perhaps make it more understanable to junta: In my native place, Sand is mixed with cement in some proportion while building houses etc. That sand is free of cost and is being brought from the bank of Ganges river, but still you have to pay couple of hundred bucks to get that trolley in ur doorsteps because it involves the transportation cost, driver’s services and other labor. There is a price for free product !!!

This globalisation becomes more hated in turbulent times like present. USA is falling apart and nations are/might try to follow protectionism approach. There has been statements from PSU banks after ICICI reported big losses sometime back that they are safe as they have been wise enough not to expose themselves to US derivates. Good to hear but how many of them share the same pace of growth as ICICI? Even now, ICICI is the biggest bank while it was formally founded somewhere in 90s. No marks for guessing higher the risk, higher the reward theory.

This globalisation is not nothing new, nor it’s flaws and threats. It has been feared in different countries in different ways in different times. In 80s, Japan threatened world especially US with its superior technology, financial acumen and innovative practices. Toyota, Canon, Sony has been on buying spree and it was then thought that whole of US would be working somewhere under Japanese companies. All these companies have gone global by keeping their base in Japan, but still US survived and companies like GE not only thrived but fastly thrived.

And where’s the silver line in all this phenomenon? It helped in International trade and global economic integration resulting from it has led to raise of standard of living in developed and developing nations, facilitated the flow of ideas and people, strengthend the international laws and helped millions of people to come out of poverty. There is very dangerous tendency to curse globalisation during recession time and follow a protective economic approach (like debate going on in US to cut short H1 B, keep jobs inside etc) but it does more long term losses than short term benefits.

Every positive article covering recession quotes that recession is an opportunity and all the big companies like GE, Coca-Cola are borne out of big recession and that’s true too. It’s not the time to be protective, infact every government and its citizens should make meaningful contribution to the International trade. Banning Chinese toys or Indian outsourcing contracts would lead to an isolated world where trade would not be transparent, foreign participants would be deterred in the domestic markets, hampering innovation, raising the cost of the consumer products, limiting growth and ultimately leading to low level of living.

Regionalism, protectism, nepotism of any kind should not be promoted. If you hate globalisation, then you can’t condemn what Marathis are doing in Maharashtra with North Indians, or what Tamils are doing in Srilanka or what terrorists are doing in Kashmir. If Indian people should boycott foreign goods, then why not UP should bycott Maharashtra products and Kanpur should boycott Agra caricatures and then Sarvodya Nagar should boycott Saket Nagar’s maid and auto-walahs. The world would be restrcited to fences and all the international trade laws which has been set up after years of refinement would prove to be failure. Let’s not create more problems to this world which is already having enough of it’s issues.

Final word: Capitalism with all its flaws is the best way to prosper. However, describing this line would require another blog.

Goodbye,
Pawan

Reading any financial daily is a pleasant experience in itself these days ! Look at the four headlines of Monday 12 Feb, Economic Times:- AV Birla group buys Novelis for $6 billion, Vodafone pips rivals, bids values Huthinson Essar at $19 bn, HDFC to buy out Chubb in insurance co, Yet another price cut in petrol and diesel likely. Now, this is what one should call true India shining campaign. And this is not the case with any particular day but almost daily pages are inked in praise of Indian entrepreneurs.

The reforms in 1991 are showing their colors now. Can one imagine that Indians who were once just having enough foreign exchange to support two weeks imports are now on roll out mission or according to BBC are buying out world. I recall an instance from ‘India Unbound’ by Gurcharan Das that quotes how Rahul Bajaj was once threatened to manufacture more scooters than he is licensed for. He reiterated saying that his grandfather has been to jail for country’s freedom and he’ll be for country’s spirits. Now those Indians don’t know where the limit is ! First Tata Corus deal, with India expanding in Latin America and with this Hindalco deal, Indians are sprawling in US too. LN Mittal (he is still having Indian passport) bench-marked all this by the biggest of all Arcelor deal. It was real case of test of Indian acumen. When everything was against, at odd, Mittal stood like a man of steel, what he manufactures himself. Previously in a no. of deals, Indians fail to give final blow like Dhoots buying for Daewoo electronics etc. The no. of deals of Indian companies acquiring foreign companies has outnumbered the opposite case.

There is everything green about Indian economy. India is the fastest and stable most growing  economy still last quarter of century. First at 5-6% in 1980-1990s to 7-8% in 1990s-2000s and now at almost 9% … whooping ! And it all seems to challenge all the prevailing laws of economy. Now riots in Gujarat or Tsunami doesn’t affect the economy. FDIs inflow is increasing more and more in comparison to FIIs, as the priorities of global companies are changing. They now don’t see India as a place of big middle class (more than US population) or as mere consumers but they now wish to be part of us. They are settling their bases here, look at any automobile major and they are planning to take India as their export base.  And better part is that this M&A air is equally distributed. Obviously manufacturing sector has an edge (or it seems owing to whooping sum of money involved) but other sectors are also showing their mettle. Pharma and Healthcare sector has 14% of stake in all this exercise.

Now whats the implication of all this? Is it that Indians are on a rolling ride… yaa they are but its a symptom and effect. The cause of this is the increasing faith of Indians in themselves. In this post, i haven’t mentioned about IT, Reliance and Infosys etc, which are being projected as pillars of Indians economy or dream. Now India as a whole is shining. Indians have become global, they are seeing sky as the limit. Indian students are increasing for MS admissions in leading universities, Indian celebrities (Shilpa melodrama) are snatching the headlines of Daily Mirror and Guardians, Indians directors are directing actor Johnny Depp and Italian prime minister is paying tribute to an old woman’s ashram in Calcutta. India is commanding respect. Long live the ride !!!