Feeds:
Posts
Comments

Posts Tagged ‘recession’

I heard an intriguing doomsday theory the other day. Now, I love doomsday theories. They make good fodder for my stories. The theory I heard then is that 2012 will definitely happen.

For those who don’t know the significance of the year 2012 (where have you been the past few months and why haven’t you watched the movie?), there exists an ancient Mayan Calendar System which predicts the end of the world in the aforementioned year. Of course, like all doomsday theories, this one too has naysayers who claim nothing of the sort will happen and that doomsday mongers have drawn this erroneous conclusion based on the fact that the calendar ends on winter solstice (or is it equinox?) 2012.

According to this intriguing new theory, the world will definitely end, only not in the volcanoes-erupting-Earth-caving-in-Sun-getting-outta-control kinda way but in a more sophisticated financial Armageddon kinda way. So you’ll have a situation where the banks and bourses have collapsed, asset prices have collapsed and there is hyperinflation. Unable to afford food, people will die of starvation and there will massive looting and vandalism. What we will have eventually is massive geo-socio-politico (and any other o you can think of) unrest.

The reason: The US economy is on a headlong collision course. The levels of debt and unemployment are extraordinary and you have a set of politicians who are out to destroy the currency. Not bad enough?

Picture Spain, one of the bigger European economies. Its economy is in worse shape; the housing sector which was the driver of growth there has completely collapsed and thirty per cent of the population between the ages of 18-25 is without jobs. To make matters worse they have the common currency, the Euro. Otherwise the natural thing would have been to devalue the currency and somehow get growth back on track. As things stand today, they are staring at massive deflation and that is never good for growth.

Then there is China where the Central bank has been conducting the most extraordinarily inflationary experiment and flooded the system with liquidity. As the result there are huge asset bubbles everywhere and danger of hyperinflation.

You see where I’m going with this? No? Rest assured, neither do I? All I know is I’m going to liquidate all my stock market holdings and stuff the cash inside my mattress. After all, during the conditions reigning at the time, I just might be able to afford a packet of sugar.

Advertisements

Read Full Post »

As many of you may know, recently I had desperate need for a notary as I had to get an affidavit (and no, it wasn’t a name change) verified.

So I sent a flunky (basically the security guard at my building looking to earn an extra buck at the expense of his current job) to Andheri Station east to get a stamp paper of Rs 10 denomination from one of those little stalls that specialise in preparing legal documents. He gives me call from there and says it’s not available. “What do you mean it’s not available?” “The government has become so vigilant since the Telgi scam that blank stamp papers can only be bought from the court of something like that,” he says.

How ridiculous is that? What does the government think? I’m going to open a fake stamp paper racket from the cosy confines of my home? Besides, the scam involved creating fake stamp papers, an activity that typically takes place before buying one. What can I possibly do after I purchase one except type on it?

Of course, it’s perfectly legal to purchase one from the little stalls but then they lose out on the typing and printing charges, don’t they? So they’ve collectively figured out that the way to go is you can purchase a stamp paper, but only if you get the matter typed by us. Extortion? Ah no. If you must call it something, call it an acceptable form of enterprise, an oligarchy if you will.

But I didn’t know that. Then.

Anyone, I was left with no choice but to take a trip down to Bandra, to the small matters (or is it affairs?) court. As soon I arrived, a black-jacketed lawyer swooped down on me. “Want to get married?” “No,” I said. “I didn’t think so,” he said knowingly. And I’m like what’s that supposed to mean? Agreed I’m no spring chicken but I’m in my dotage either. Agreed I’m no Miss Universe but I’m reasonably pleasing to eye. And I don’t think I give out militant feminist vibes. So why couldn’t I get married?

Then another black jacket swoops down on me. And another. “Dowry case?” “420?” I could go on about that, but I digress.

I finally fought my way through the black sea, landed up at the window and asked the guy for a Rs. 10 stamp paper. “Discontinued,” he says. “Okay, 20 then.” “Discontinued.” “Fifty?” He takes a while, chews a bit on his paan, spits out the juice, wipes his mouth and says, “See, myadam, the cost of porducing a 10 rupee paper is 3 rupees. That means only 7 rupees profit. Gorment has no interest in making only 7 rupees profit. In 20 rupees, only 17 rupees profit, in 50 rupees…” “Yeah, yeah, yeah I get the picture. So what’s the minimum I can get?” “100.” “Okay, 100 then.” “Not available.” Yeesh.

Armed with the 200 buck stamp paper I came home and printed out the matter. Then I called the notary. “What are your charges?” I asked. “200.” I looked at him aghast. “But…but it costs only 45 bucks in Delhi!” I sputter. He shook his head sorrowfully. “This is a state subject and they can charge any amount. As for me, I have to put 25 bucks notarial stamps on the affidavit. So what does that leave for me?” “A healthy 175 bucks profit?” I said sarcastically. He wasn’t amused. “Who do you think pays the rent for this place?” I bought his argument. After all, I’m overpaying for my cubbyhole flat, aren’t I?

On the way back I got a rickshaw which had a faulty meter. I tried to argue with him but he wouldn’t admit to fraud. “Fine,” I said, “let’s go the havaldar and we’ll see who he believes.” So we went to the havaldar and I said, “This guy’s meter’s running fast.” The havaldar looked shocked. “Aisa kya?” and he boxed the rick driver behind the ears. Hard, like only they know how.

And just as I was starting to smirk, the rickshaw driver started snivelling. “I am so sorry, sahib, but the rates haven’t been changed in five years. And with everything getting so expensive how am I to survive?” This appeal obviously struck a chord with the havaldar and he turned to me. “Myadam, let it go, no. You know how expensiu everything is. Tur dal’s 90 bucks a kilo, potatoes 20 bucks… how is he to feed his children? How is he to survive?”

I don’t know, vasectomy maybe? Let’s see, I’m paying for the little stalls’ survival, I’m paying for the state government’s fiscal deficit (over and above the already vulturine taxes), I’m paying to feed the rick driver’s children, since when did everyone’s dearness allowance become my concern? And who’s paying mine?

Read Full Post »

My house has been in a state of turmoil these past few days. It began with my maid’s son’s school graduating to class 1. With the promotion came a change in school timings. While earlier he used to attend school for a couple of hours in the morning, he now goes from noon to 5.30.

This resulted in flurry of adjustments. The maid had to take off sooner in the morning so she could reach home and prepare him for school. So the jhadoo pocha were shifted to evenings.

Now even in the evening, she used to come in at 5-5.30 to prepare dinner. But now, she has to go and fetch him school then. She asked me if she could come in earlier, say at 4. I screamed and shouted, “Am I going to house bound forever (she doesn’t have a key)?” She relented and said she would come around 6. This suited me fine. “But,” she added darkly, “I will bring my son.” Faced with the prospect of daily baby-sitting, I was ready to cook myself! I would done it too had it not been for my race to finish my next book.

But things turned for the better. The son decided my company was boring and elected to stay at home. Amidst typing frenetically on my computer, I kept trying to teach him spoken English. Not exactly thrilling for a 6 year-old to come from one school only to get into another.

A change was affected yet again. She would pick him from school in the evening, lock him at home and come to work. A most satisfactory state of affairs. Till a fire broke out in the vicinity of her shanty and her son was trapped inside, all alone. Thanks to the quick-mindedness of her neighbours the son was rescued, more frightened than hurt.

Then she declared she didn’t want to leave him alone at home and that she was quitting. Cooking, that is. Panic buttons were hit all around. Not that she’s a great cook or anything, but the thought of finding and training another one was just too much.

Then days went by and nothing more was mentioned in this regard. One day, just out of curiosity and with a lot of trepidation, I asked her, “What happened? You said you were quitting?”

She looked at me and said, “And how am I supposed to manage? Everything’s so expensive. Onions are still 18 rupees, 3 rupees for one egg, up from 2 rupees, dals are at 60 rupees, rice…” you get the picture. So she has no option but to either risk the safety of her son at home or bring him kicking and screaming along with her.

Similarly with my press-walla. Just the other day he urged me to give him more clothes as he needed the money. Now, I’d already started giving him my night clothes as well for ironing. The only way I can I help him more is if I stated giving my undies as well. I refuse to do that. I mean, how freakish is it to wear ironed undies?

My heart bleeds for all of them and in my own way I try and do as much as I can for them. But by how much and how many can I help? Inflation is hitting me just as hard. My fruit and vegetable bill has gone up 50%. My restaurant bills have doubled. Before you cry, off with her head! for this Marie-Antoinetteish statement, let me explain that a lot of business in TV and film is transacted in pubs, coffee, shops and restaurants.

The government and the media might cry themselves hoarse that inflation is on the decline and that there is hardly any year-on-year growth. That’s just it. There is not much year-on-year growth because inflation was already at 12% last year! Plus a large part of the basket comprises oil. And oil prices have dropped. Never mind that the decline hasn’t exactly resulted in reduction in your expenses.

God, I hope the royalty cheque comes in soon!

Read Full Post »

Day before yesterday, I had a group of friends over for dinner. It was small gathering comprising friends from media and finance. Over drinks, the conversation veered off towards politics, economics and the general condition of the Indian state. And the party, which began on a cheery note, soon turned solemn.

It was alarming to hear such depression in their voices when just eight months ago we were clinking our glasses in good cheer with celebratory cries of, “Here’s to us being a trillion dollar economy.”

One in particular (let’s call him A), a banker, had had depressing meetings with his clients. The fortunate ones among them were revising their targets downwards and the unfortunate ones were being forced to take more drastic measures. Like temporarily shutting down their plants. “I think we should all prepare to lose our jobs,” he said, gulping is drink in one straight draught and gazing longingly out of my sixth floor window. I hastened to shut the window. He had imbibed half a bottle of my finest single malt.

Soon others of his ilk joined him by the window and indulge in the gloom talk. “And we’re not even talking about the BPO sector. Just imagine what happens when they lose their jobs.” “Real Estate is the worst hit. I think some developers are going to hang themselves next year – not the big guys, the smaller ones.” How comforting. “And retail, the marquee name for the India story, most supermarkets and malls have huge outstandings. Their vendors have stopped supplying them.”

The party was starting to resemble a wake. Soon everyone was singing drunken dirges of commodities, equities, inflation, currency and interest rates. The window had been reopened (it had gotten awfully hot with everybody there) and they all joined A in looking speculatively out of the window.

“Media!” I chipped in, desperate for some good cheer. “Media is fine, isn’t it, F? Everyone knows media is depression proof. Karan Johar said so in the papers today.”

The traitorous F, a TV producer, shakes her head. “No man. Most TV channels are in bad shape. They’ve all cut down on hours of original programming and filling in the rest of the slots with repeats and reruns.”

“Oh?” I said, momentarily forgetting my Santa Claus duty. After all this affected me directly.

“Most big ticket movies have stalled or have drastically scaled down their budgets,” P chipped in cheerfully.

Great. And we hadn’t even touched upon politics yet.

Read Full Post »

One thing is for sure. Whatever regrets I had about giving up my career in investment banking, I don’t any more. I have to admit that I did feel twinges of doubt when the markets were soaring and all my colleagues were taking home upwards of a crore (10 mil) while I was struggling to eke out a tenth of that.

I’ve been through such a bear phase before, in the year 2000. And living through two such phases is just too much for any one person to bear. Okay, poor choice of words there. I should have said endure. I personally know at least two people from the industry who’ve suffered fatal heart attacks in their early thirties. All right, perhaps it wasn’t the pressure alone that did them in. Their almost completely non-vegetarian diet and incessant smoking and drinking probably also had something to do with it.

We are in for a rough time here in India as well. It is a global pandemic and in these integrated times global flows of liquidity decide what course a country’s development will take. Domestic liquidity was stemmed in earlier to fight inflation and now companies are finding it difficult, if not impossible, to borrow abroad. So how do they carry on their operations?

We are in for lower GDP growth, job, cuts, lower savings, lower investment and, therefore, lower growth. What was once a virtuous cycle of positives on all the above counts is fast turning into a vicious cycle. How long it could take to sort itself out – 12 months, 18 months, 24 months or more, is anybody’s guess.

What all this means for a writer is of course, new story ideas to reflect newer realities. For example, many thriller writers almost went out of business after the end of the cold war between the USA and USSR. Till they found terror. Perhaps it is time to think the same economically?

Read Full Post »