This year will most probably be remembered for all the bad things – terror attacks, job losses and fall of legendary institutions like Bear Stearns and Lehman Brothers.

In the last thirteen years in my professional career, I have not seen a worse year. While we all knew that the US sub-prime crisis would hit the financial markets sooner than later, none of us expected this mayhem.

The initial crash in January was almost welcome. The Indian stock markets had almost risen to surreal levels and all that decoupling talk was really hard to digest.

But post-June, when financial institutions started closing down or getting sold, the real fear began. Till then, it was a blip or in stock market parlance, a correction that was overdue. Things have really gone bad since then. Stories of job losses and salary cuts have become common now.

The rate cuts and capital infusion by all the central bankers have really not helped. Of course, the effects will not be immediately seen. But banks are quite wary about lending. From indiscriminate lending to no lending, many banks have come a long way.

And to round it off, after Delhi, Orissa and so many other cities… the Mumbai attacks. While critics have panned the media coverage by calling it elitist, I have a slightly different view.

Though floods or earthquakes cause many more deaths, this was something completely different. The number or kind of people were not important. It was simply about the audacity of it all.

While, we constantly hear about terrorists engaging in gun battles with the army in Jammu and Kashmir, we have never heard of a gun battle where terrorists fought the some 600-plus army and policemen for three full days in any of the major cities in India or perhaps, even world. As a Mumbaikar for my entire working life, I am sad to see the state of the hotels where I used to spend hours.

And, of course, the aftermath. Now that Pakistan has conveniently shrugged off any responsibility, India faces the tough challenge of making things happen.

As 2008 comes to an end, I pray that the next year is much better. Lesser terror attacks, fewer job losses and some turnaround in the stock market will definitely make me feel better. Guess, I am asking for too much…

But what is making me really happy is that this year is almost over. Goodbye, cruel 2008

- Joydeep

In June this year, Electronic Arts launched Spore Creature Creator, a $10 version of its Spore game. Then, from within the application, players could share videos of their creations by clicking a button and uploading to YouTube. The idea was to get buzz going about the game before its September launch. To date, more than 160,000 videos of Spore creatures have been uploaded. The most popular of these videos has been viewed 194,000 times. EA ran a contest on YouTube, including a link to buy the game online on the contest site. This is the latest way, YouTube helps monetise your videos directly. (more…)

The technology industry has taken some big hits in the current economy as consumers and businesses curtail spending. But one segment of the industry sees a silver lining to the downturn: video games. Really, you’d ask.

Game companies like Sony Playstation and Microsoft Xbox are claiming surge in sales and they’re aiming to capture business from people who are staying home more and looking for escapist forms of entertainment. “We really do believe that we are less susceptible to economic woes than, say, big ticket luxury items or a lot of different industries,” said Dave Roberts, CEO of PopCap Games, maker of the popular game series Bejeweled in an interview to US dailies. Roberts, like others in the game industry, said October to December were strong months for his company, despite the nation’s accelerating financial meltdown.  (more…)

At first, I didn’t get Twitter. The internet service allows users to write and send, via SMS or online, short (140 characters max) messages to a network of fellow Twitters, usually off-the-cuff updates describing what they are doing at the moment. I couldn’t see why anyone would want to have such insights into my life. However, slowly and surely, after getting enough emails from people who said they were following me on Twitter, I started using it again.

It would be safe to say that probably most of the country’s 40-odd million net users still don’t get Twitter, but 6 million do. That is, six million have signed up, according to ABI research reports, but concludes that “the number who use it regularly is much smaller.” Still, that’s not bad, considering it was launched in 2006, although as the report says, it didn’t really begin to take off until around March of 2007. Twitter continues to amaze, astound, or underwhelm and baffle, depending on your point of view. Most people, however Twitter to communicate with friends on the fly. In fact, during the tragic carnage in Mumbai, one writer acquaintance of mine used Twitter to get updates from friends who were texting while in hiding. (more…)

I watched two Australian movies –one on the way in to Australia in Qantas QF 124 and one on the way back in QF 123. You see, I wanted to get a glimpse of Aussie history and lifestyle and generally get ready for the Outback. ‘Squatter’s daughter’ had everything the name promised. This epic from 1930’s dealt with the tough life of a er…Squatter’s daughter. Before you draw your conclusions, a squatter was any one who held a patch of land with the help of a gun or two and raised sheep which inevitably got stolen. Now that the squatter was away in England or was dead, the pretty daughter (who had a way with horses and weak men) was in charge of affairs and fending off the everyday challenges raised by sheep thieves and encroachers. It was one of the first ‘talkies’ and it was fun to watch not because of the interesting costume worn throughout by the ‘daughter’. Heck, the movie even gave a glimpse of how the Harbour Bridge at Sydney looked soon after completion – a massive ‘coat hanger’ structure with nothing much h around it. Wonderful.

The second movie titled ‘Newcastle’ was more contemporary. And that meant lots and lots of young boys and semi-naked girls using a lot of F-words and living a carefree life of surf, sex and hmmm..more surf and sex. Every now and then the movie would get caught in reels of surfing footage, which I am sure cost a lot to film, with no connection whatsoever to the plot. Actually the plot was absent till some one dies in a surfing accident. Don’t worry, that was the insignificant part. Oscar material, I am telling you.

And then I saw a documentary on aboriginal art – which told a lot between the lines. Every one, including the new age Australians are now paying tribute to the original masters of the land. History cannot be shaken away from memory since it leaves worry lines on the face of earth for all to see. The clashes between the settlers and locals were fierce and entire communities were wiped off in the process. The legend of modern Australia, and yes the famed spirit, is built on thin crusted victory of gun powder over arrows and guess what, the signs are everywhere. It is really a bad scene in some parts of Australia – in Tasmania for example, there aren’t any full blooded local. You do encounter aboriginal centres, like the one at Wilcannia where we saw locals getting suitably drunk at noon. Most of them were on government support and they wore Chinese made t-shirts. Their smiles showed decayed teeth and almost all of them smoked – something or the other. And they looked beautiful.

But what lures me to Australia is not movies, art or the aboriginal history – not if you are an Indian who is familiar with his share of movies, truck loads of art and documented history of over 5000 years.  It is the open road that charms me…roads that leaves to no where in particular and irrepressibly romantic for someone who loves life from behind the wheel of a car. As the massive SUV (read BSM January’09 edition to find out which car…) floated at 110 kph, stormed the dirt tracks at even greater speeds , I was living a life denied to me in India. A large continent of a nation with brilliant roads and exotic tracks, generally friendly people (imagine the population of Mumbai in a whole continent…they got to be pretty happy, right?) and lots of chips with everything you order. Let me assure you…you cannot go wrong with the Outback.

A total of 3000 km starting from Sydney and ending in Sydney. And not the usual Gold Coast route. Broken Hill and Mungo National Park are not your average destinations but we at BSM wanted a crackerjack drive for the upcoming anniversary issue and that is what Australia presented with us. And the car in question? Hmmm, you will have to wait for the 10th Anniversary Special of BSM to get the answer.

Across the Blue Mountains and beyond Dubbo lies Broken Hill and beyond Broken Hill lies the Silverton with a total population of 50 people. And right when we thought we have seen enough of the Outback and roos and emus…the next day presents us with unsealed roads. Our massive SUV left a long trail of white, fine dust as we headed to the Walls of China and the long lost lake of Mungo (18000 years is ‘recent’ in history, mind you). 

Two Indian motoring scribes, a very German car (shhhh…), in Australia, heading for Walls of China…interesting, right? Things one got to do to earn a living! By the way, the 10th anniversary issue of BSM hits the new stands towards the end of December…BUY!

In the last few months, when Fixed Maturity Plans (FMPs) of mutual funds were in some serious trouble, I was speaking to a lot of industry experts. The general view was that the product was suffering from a perception problem.

In the last two years, when interest rates were on the rise, FMPs became a big hit with investors. This is because they were giving better returns than fixed deposits (FDs). Plus, there were tax benefits as well.

When the marketing people realised this, they went the whole hog. But as usual, they went for the easier option – corporate money. And to attract those crores in a single deal, fund houses were forced to compete. The result: Each fund house was trying to outdo the other, in terms of the interest rate being offered. No wonder, fund managers found themselves under constant pressure.

In defence of marketing people, once another fund house offered a higher rate, it became a benchmark and both distributors and investors started asking for that rate or even more.

This led to a situation where even a short-term debt fund manager was forced to invest in longer-term or riskier papers to hike returns. And that is a perfect recipe for disaster. “The marketers do not realise that to give 0.5 per cent more, I have to put the entire portfolio at risk,” said a former debt fund manager.

When the going was good, no one complained. But as fund houses have found during the recent run on FMPs, liquid and liquid-plus funds, things can really go crazy when there all corporates hit the exit button at the same time.

There isn’t much of a secondary market for many of the underlying papers of these schemes, especially commercial papers and pass through certificates. And the few buyers would want their pound of flesh and purchase at a hefty discount.

Now, the market regulator, the Securities and Exchange Board of India (Sebi) has tried to solve the problem by introducing a “no exit clause” from FMPs. Instead, they will have to be listed. I do not know whether it will help or not.

But I am sure that FMPs will not stay the same. The rates of return they are offering are already down from 12 per cent in October to 7.5 per cent now. Also, in a lower interest rate regime, gilt funds will always be more attractive. But what has hurt fund houses the most is the overall negative sentiment. Especially, the corporate sector’s sentiment, which accounts for over 60 per cent of the money, in FMPs.

The lessons to be learnt are many. For one, excessive marketing and the rush to increase the asset base can hurt a decent product. Also, over dependence on corporate money can be counter productive. And most importantly, running after retail investors may be costlier but when fund houses lecture investors that money can only be made in the long term… they should be viewing their own business in a similar manner.

Already some CEOs and marketing heads are talking about moving from excessive exposure in debt to equities. Haven’t we heard it all before?

Leslie D’Monte

He made Vodafone a household name in India, and now is all set to make his mark online too if a Wall Street report turns out to be true that the former Vodafone Group chief Arun Sarin is close to becoming Yahoo! CEO.

Sarin, 54, retired from Vodafone this May after being CEO of the European telecommunications giant for around five years. He has, among other things, ardently spoke about the mobile Internet, and has had served a stint of less than one year as CEO of InfoSpace in 2000 to 2001, which make him a good candidate for the distant number two online search player. Sarin had reportedly resigned from InfoSpace due to the rigours of commuting between its offices in Washington state and his family’s home in the Bay Area.

Yahoo!, of course, expects to come up with a pool of about a dozen candidates and settle on one within six months, though there’s no firm deadline as such.

The move follows Jerry Yang’s recently decision of stepping down as CEO of Yahoo!. Investors were delighted with the announcement. It helped its ailing stock soar nearly 9 per cent to close at $11.55 on the Nasdaq, a day after the announcement. Of course, the Yahoo! chief — who took the job as CEO in June 2007 to unsuccessfully attempt to spur it to glory again — said he’ll stay on as CEO till a replacement is found (expected in Q1 next year).

The company — founded three years before Google — is now way behind the internet search giant. The Yahoo! Board, reported the Wall Street Journal earlier, is said to be looking for an “anti-Jerry” to turn things around — executives who are not mere thinkers but have strong operational skills who may be veterans of the high-tech and media worlds. Tim Armstrong, a senior vice-president at Google, and Peter Chernin, president of News Corporation are reportedly being considered at this stage though there was no confirmation.

However, hiring a replacement CEO with “Chief Yahoo” Yang still at the helm might make things difficult for a stalwart like Sarin who himself has been in-charge of driving things with his own vision.

However, it may be exactly the medicine that the ailing Yahoo! might need with Google and Microsoft breathing down its neck. Besides, if Google has its Eric Schmidt despite the two mavericks in-charge (Larry Page and Sergie Brin), there’s no reason why a Sarin (or some other CEO) should not be able to work with Yang. Watch this space.

Governments the world over, rich and not-s-rich alike, have announced they will invest billions of dollar to prop up their economies. Money has become dearer and jobs everywhere are being brutally axed. Paranoid consumers are reluctant to make new purchases. Governments want to solve this situation by putting money in the hands of consumers. Keynesian economics is back in the reckoning after decades in the cold storage.
John Maynard Keynes (1883-1946) was a British economist who gained huge recognition after the Great Depression. Any government, he argued, needed to spend large sums of money to stimulate a slow-paced economy. The counter argument was that it ran the danger of crowding out private investment. It was also seen as interference in a perfect market economy – resources would be diverted from what the market forces needed to what the government thought was important.
But when he espoused his views in the mid-1930s, Keynes hit the popularity charts almost instantly. He gave mainstream economics its life breath back. Russia was making rapid strides with its planned economy when the Great Depression stuck. Because it had little contacts with the rest of the world economy, the meltdown left it totally untouched. Influential statesmen, including Jawaharlal Nehru, began to doubt the ability of free markets and private enterprise to sustain themselves. The answer was first provided by Keynes.
Or, was it? There is evidence that an Indian king used similar tools to rejuvenate a slowing economy almost 150 years before Keynes published his famous work, The General Theory of Emplyment, Interest and Money. Asaf-ud-Daula (1748-1797), the fourth Nawab Wazir of Awadh, moved his capital from Faizabad to Lucknow in 1775. Nine years later, in 1784, Awadh was visited by a devastating famine. It brought all economic activity in his kingdom to a standstill. All rural demand collapsed and consequently the factories in the kingdom too stopped.
It was then that Asaf-ud-Daula embarked on a huge initiative to build magnificent monuments and palaces in and around Lucknow. And for this he spent liberally from the royal treasury. All of a sudden, there was work for people and the Awadh economy soon came out of the slowdown. Till date, people in Lucknow say when they get help from unexpected quarters:
Jisko na de maula, usko de Asaf-ud-Daula
(Who is ignored by God, is taken care of by Asaf-ud-Daula)
So, who first thought of economic stimulus, Keynes or Asaf-ud-Daula?

This isn’t an ideal first post for the blog. But then, we don’t live in ideal times, do we? It’s already been more than a week since the Mumbai terror attacks and even now I think of some of my friends and family members in Mumbai who could’ve been dining at the Taj or Oberoi and even died in a matter of few seconds. I still wake up in the middle of nights, thinking of how it must feel to hide under a bed, with a fire raging around you knowing damn well that there can be no escape. I wonder how the last seconds of anyone’s life tick off knowing that a random bullet can just be the end of everything. I think of the plans these individuals may have had; meetings and dinners and movies… or even plans of snuggling in a blanket with a hot cup of coffee and calling it a day, sitting and chatting with family members or playing with their children. 

Imagine life for a young bride-to-be coming to an end just because her fiancé decided to treat his friends at Café Leopold and just because he couldn’t survive the stray bullet at that moment. Imagine, children waiting for their parents to come home from a dinner at Taj to help them prepare for the next day’s Math paper in school. Imagine, a four-year-old girl, incidentally names Abhilasha, whose mother died at the CST railway station because… well, because she was there at a wrong time. Imagine the fate of so many people, rich and poor, young and old, for once, being the same. Imagine so many jawans, so many policemen, so many officers, so many people, dead… 

The truth is, our imagination can die out but the stark reality of the Mumbai carnage will haunt us every single minute, every single day. 

Oh, of course, work never stopped and we are back to being in editorial meetings where we discuss lifestyle stories, we are back to calling up PR guys in Mumbai who are promising us to give us the best possible stories. But some of them, I know are still very, very shaken. In fact, I was chatting with a PR person when he admitted that he’d never been so scared to say his name out loud: Adnaan Sheikh. This young PR person decided to forgo dinner at Taj because his shoe was biting him. He left his client Andreas Liveras, shook his hand and pardoned himself and headed home only to be told that his client was trapped in the hotel and died second later. Adnaan wakes up in the middle of the nights each time his dog barks and invariably ends up thinking that there’s a terrorist watching him from the bedroom window. He doesn’t see films (“too scared to go to PVRs ya”), but what shakes me is how insecure he suddenly is about his name, his identity, his religion. “I’m sure of myself and how angry I feel about the Mumbai attacks but I’m also very insecure in a way that I’ve never been before,” he told me. I really didn’t know how to comfort him or say to him… 

And to be frank, I personally don’t know how to deal with the Mumbai episode either. As someone whose biological clock is ticking away (and mind you, relatives are like Duracell batteries who make sure you keep hearing the ticking sound), and as someone who loves children immensely, it shakes me completely that my own set of beliefs are witnessing a drastic change. Having undergone depression and felt pangs of jealously every time friends have announced the stork’s arrival, for the first time, after the attacks, I thanked my stars for not being a mother. Because, for the first time, I was sure that all we have in this world is fear (lots of it) and plenty of jingoism (distributed free after so many casualties). 

Will my children enjoy picnics; will they know that yes, firecrackers are different from AK 47s and grenades; will they enjoy that evening in the park; will they know that a strange uncle with cargo pants and a rucksack isn’t necessarily a terrorist with lots of ammunition; will they feel safe? Forget them, will we feel safe ever?