The Goldman Story

The whole Goldman story has been nothing short of a Bollywood potboiler over the past couple of years. And the best part is that there are no good guys and bad guys here. The more the saga unfolds, the more interesting it looks! But it has brought to the fore the very duplicitous nature of business and regulation, both!

When the whole sub-prime season was on, Goldman beat the Street, so to say. And suddenly people were looking to Goldman to lead the way and show the world how business is done despite a slump in the sector, and a slump in the economy. The CEO was lauded, the world looked in awe as Citigroup was brought down to its knees and almost nationalized and Merill was rescued by the Government and BofA, while in the midst of this carnage, Goldman kept looking extremely strong.

And while all this has been happening, comes news that the CDOs that Goldman had been marketing had underlying instruments that had been chosen by Paulson & Co. a hedge fund that had intentions of shorting these same securities. The implication? Imagine sailing on the high seas in a boat knowing that the boat had a hole in the hull! And now, after the SEC has sued them and there has been sufficient hue and cry over the lack of governance laws, there has been an out of court settlement of sorts. The heads won't roll, the penalty will be at $550 million, and the core issue has now been reduced to a lack of completeness of marketing materials. All this, after Goldman initially denied any of these allegations. How then suddenly did they acquiesce to a settlement at all?

And then comes the insider aspect. Stephen Friedman, former Goldman Chairman and then audit committee chairman was accused of picking up Goldman shares when he was chairman of the Federal Reserve. All this while the Government was busy bailing out AIG and paying people caught in AIG's tentacles. So while the Fed clearly perhaps knew that such a bailout was imminent, they perhaps also knew that Goldman would be a key benefactor! How then could Friedman pick up shares that resulted in him netting a cool $3 mn in paper profits? The case is feeble, since they are looking at a possible exception. But reasoning begs that one understand how a legal exception can preclude common sense! Even if the law allows it because of a loophole, wouldn't a Fed Chief who knows about an imminent windfall not be making use of this inside information when he nets a cool profit through this benefactor? Another lapse in judgment came when another former director let slip news of Berkshire Hathway's $5 bn investment in Goldman. At least he didn't stand for re-election to the board!

While all this has been happening, people have wondered about the law. On one hand, one can see glaring errors of judgment. But they can also see massive loopholes in the law that allow one to simply commit the transgression and still skip away free. So who is the bad guy here? The transgressors themselves, for not having a conscience? Or the lawmakers for leaving laws so lax? We can argue both ways. One can say that transgressors will always exist. And it is up to the regulators to ensure that they don't run riot. But then, what happened to the Classical theory of Economics, that needs the least Governmental intervention? Can that theory effectively be put to rest having fallen prey to the machinations of the human mind?

The debate will forever go on. But till then, the media will have a circus to pry on. Had Merill not gone under, someone would have covered John Thain's multi million dollar loo as a Wall Street Heirloom, rather than glossing over the 'John Fiddled while Wall Street burned' image of Thain. But I guess this is indeed the flip side of capitalism - amazingly good as long as the going is great, but at the ebb of gloom when things go a bit awry.

Demo CRAZY!!!

This week saw a coalition government in Britain for the first time ever. There was such a lot of hue and cry surrounding it, that people in India were at a loss over why! Since we have had coalition governments since eternity. And two years ago, the most bizarre form of coalition governance was seen in Israel, after every party claimed success! And if we look at all major past British colonies, a funny trend comes up.

The United States has a perfect two party political system with the Republicans and the Democrats. And by and far amongst all the biggies of the developed world, they have maintained this system for the past 234 years! Take Australia. They supposedly have a two party system, but sometimes, they are pushed to a 3 party system calling for coalitions at times. And now, the UK has stepped into the coalition game as well. Canada is another major player in coalition politics.

But look at India. 7 National Parties, 42 regional parties and 730 unrecognized, yet registered parties. So are we an example of democracy gone horribly wrong? True, democracy is precious. Thailand is a glaring example. People are arguing and fighting over the lack of a proper and transparent form of government. I remember Aghanistan, when people first stepped out to cast their votes post the tyrannical Taliban regime, there were luminous smiles on peoples' faces, they suddenly felt so empowered at being given the right to choose their own governments! The right to decide what happens to them as a country. But in India, the world's most populous democracy, the story is a tad bizarre.

Shepherding so many parties is a tough ask. Everyone has an agenda and a local mandate. Aligning these and being able to achieve significant development is a taller ask! And if you have leftist, fiercely communist parties as part of the group, like we did a couple of years ago, all semblance of capitalist development can be kissed goodbye, since they would be fiercely opposed! How we passed the nuclear 123 agreement is a story in itself. And then we have the numbers trading game. Outside support with withdrawal of support at the slightest provocation, a demand for certain ministries and portfolios, bargaining to have charges against someone dropped in order to hold a government together - it all happens.

A change is certainly in order. Outside support, ideologically different parties should not coalesce as per law. Several such changes would be ideal. But how can someone expect a parliament to bring about a constitutional amendment that may be detrimental to the passers themselves? I don't know. But before we begin commenting on how things should change and how government should be reformed, I guess the first thing needed is to do something to increase the voter turnout. For till then, we may call ourselves a democracy, but only one that does not represent the disillusioned, uninterested lot. Which unfortunately makes up the majority of our country!

Int'l Women's Day 2010 - Does it really make any sense?

Last year my article was stark - talking about how women's liberation was miles away in India. And it's International Women's Day again - 10 years into the new millenium. Yet again, people are going ga-ga over the whole phenomenon of 'Women's day'. Facebook is full of status updates with people wishing their female friends a happy Women's day. Women themselves saying - 3 cheers to women empowerment and so on. Yes, we've come a long way. From being disenfranchised and restricted to the house, to running Fortune 500 companies, the woman has indeed come a long way. Texts and references nowadays, always refer to a pronoun as 'she' and never 'he'. I am not a ideologue. But I just feel that having one day to rejig our memories that women were once upon a time supressed and so need emancipation and liberation, according to me, speaks volumes about where we stand as regards gender equality. I am not a feminist. The very fact that I need to keep declaring that I am not a feminist, shows the disdain associated with espousing the cause of the woman! And all these factors really don't make me think that women are looked upon with equal respect as men, in today's world.

So, the topic of today in the news is the Women's 33% reservation bill in parliament. The timing honestly seems too coincidental. And as paranoid as I may sound, coincidence is one thing I don't really give too much credence to (Thank you Jason Bourne). So... now, move over minority religious communities, the target is the woman. As if what they have had to endure for so long has not been enough, the reservation in legislature bill is also dragged into the open. When I first heard about the bill, I was stumped, for in school I'd learned that 33% of seats are reserved for women. What I learned now, was that this bill sought to enforce the same across all levels of government. And I guess it is a step in the right direction.

In one of our visits to some parts of rural India for a project, we found that those local self government bodies that had ample representation of women, actually prospered. And there was an anthropological reason to this fact. Simple, the rural men were used to alcoholism, and the women were used to being exploited. Savings would be squandered on alcohol and the woman had to endure. The minute they found a presence in the Panchayat, law enforcement became possible. If the Sarpanch's wife was on the Panchayat as well, the women had a powerful ear to listen to them. Education was being supported, development was coming through. The model has been tested and it works. Then why the disapproval of a formal law?

Why is 'equal opportunity for all genders' still so difficult to enforce? Why is talent not appreciated regardless of gender? If we can look at talent beyond economic status,why is gender still a bias? Why is the 'upper hand' of the man so insecure as to not want to allow the woman to shine through? These Whys have somehow never found an answer. Any woman who sets out to find an answer to these questions is branded a feminist. And a feminist tag carries with it the notion of an inherent bias and inherently biased voices are seldom if every heard!

The situation is poor. The woman has to be subservient even now. Granted family has requirements that are met only by the woman. But I personally feel that that is for the woman to decide. Whether she wants to work and manage a family, whether she wants to be a maid servant or an aaya at a school is for her to decide. Whether she wants to be a corporate honcho or a scientific researcher or a school teacher who can work at her kids' school is for her to decide.

Now this incident is truly ironic. Maid servants are tough to come by in Mumbai city. Especially the good ones. I happened to have a good maid servant who surprisingly showed some ethics towards work. AWOL was not in her vocabulary and that was great news for us! So, one day I got to talking to her, and she said that she had studied till grade 12. I asked her why she didn't go work in an office as a minor clerk or typist or any other role that would justify her literacy. She said in a plaid tone, that her husband did not want her to have a secure job. It's anybody's guess why her husband, a daily wage laborer did not want his comparatively more qualified wife to have a better 'social standing'. But she was happy that she was at least able to come to work and earn a living outside of the house. Then one day a couple of weeks ago, she stopped coming. When she finally came to collect her settlement money, her explanation was - 'My husband did not want me to go and work. He got a job as a contract laborer at a construction site for a whole year. He said that he was competent enough to support me and and that his house did not need a woman's income. So, I stopped coming.'

As long as this is the attitude towards women of all social strata, I guess all we'd do is put up messages on FB and wish each other a shallow happy Women's day. I still look forward to the March 8th, where the post on this blog would be cheerful and optimistic. Amen!

We want answers

It's over. 62 hours later the ordeal is over and we are literally picking up the pieces. After being struck again and again, and bouncing back like a 'jack-in-the-box' we refuse to be treated like morons. We want answers.

• How did the terrorists get inside these hotels? They came to India by sea. But the sea is away from the interior of the hotel. So how did the enter to wreak havoc? One of the terrorists has blurted out that they had booked into the Taj to store their ammunition. What happened to security? An airport screens bags and passengers all the way to the passenger's shoes and belts. So where was the slip up in this case?
• Who is responsible for this mess and what will the government do to bring these miscreants to book?
• Can someone guarantee that the captured and convicted terrorists at least this time will be dealt with immediately and not kept indefinitely in prison thus preventing a future hostage situation ?
• What will the government do to protect us from future attacks? At least this time?
• What will be done for police reform? Will the government protect those who protect us fearlessly?
• Is the government strong enough to take a tough stance without worrying about political implications?
• What will the government do to make us feel secure in our own city / country?
• Why do our intelligence sources always say 'I told you so'! Who is preventing the flow of information?

As citizens, we demand to know, and we demand to see action. We have waited 15 years and now we are hurt, shaken and possibly stirred.

And while everyone talks about two iconic hotels that form the basis of India's affluent, I guess at least we, since neither the government nor the media wish to think about the numbers killed at the CST station, should give those people a moment of remembrance. Those deaths matter most to those families, since the cost of a meal at Tier one hotels is the monthly income of those families. They have lost breadwinners, families, households. They are Mumbai's poor. And they were sacrificed in drones. But who cares! Marie Antoinette moment? Yes indeed. Dear politicians, you just lost 50 members of your precious vote bank. At least you should care.....