Tag: amp

S&P’s Responsibilities

Reading through some of the reactions from “experts” to the S&P’s downgrade of US debt, I see words such as “irresponsible”, “misguided” and “inappropriate” being bandied around. These experts seem to be of the view that in view of all that the US is already going through (given the debt crisis et al) it was not correct for the S&P to push it further down into the abyss by downgrading its debt.

Now, the S&P is a rating agency. Its job is to rate debt, categorizing it in terms of how likely an issuer is to honour the debt it issues. It is a privately held firm and it is not the job of the S&P to prevent global crises and save the world. In this case, the S&P has just done its job. And having been following the crisis for a while I’m of the opinion that it’s done the right thing (check Felix Salmon’s article on this; he says the downgrade is more due to the risk of the US’s willingness to not default, rather than its ability; given that there is no permanent solution yet to the debt ceiling and it issues all debt in its native currency).

If a simple move like this by a private company is going to bring down the world, it is because of screwed up regulations (read Basel 2 and Basel 3) that ended up giving way too much importance to firms such as this. And I’m sure the US had adequate representation at that meeting in Basel where the accord was adopted, so it can be partially held responsible for the enormous power that rating agencies currently wield.

The bottom line is that excessive regulations based on dodgy parameters have been responsible for a lot of the mess that we see today. #thatzwhy we need strong regulations.

Rajat Gupta’s affiliations

Why the fuck does every single article that talks about this describe insider trader Rajat Gupta as a “former Goldman director”? Why not ex-McKinsey CEO? Or current P&G Board Member? And especially given that his insider trading was partly at Goldman’s expense?

Media is crazy

Teaching Music in Schools

How many of you actually enjoyed your “songs”/music lessons in school? Not too many, I suppose. Actually I don’t think more than a tenth of the students would have ever enjoyed these lessons. And I don’t think there is too much surprise in this given the kind of stuff that is taught in schools.

At some point of time during my schooling, we used to have three (!!) “songs” classes during a week, each handled by a different teacher who would teach songs in different languages. The greying guitar-wielding fag-smelling Samson was a fixture, while the other two classes were handled by different people each year, none of whom I remember. One thing that connected all of them, irrespective of the differences in the nature of songs, was that most of the songs they taught were easily classified by us as “uncool” (back then, and even now I’d consider them uncool).

So earlier today I was trying to remember the different songs that had been taught to me in the “songs periods” in school, and the common thread was religion – irrespective of language. A disproportionately large proportion (yeah I love that phrase) of songs that were taught to us were about God, or doing good, or some such thing which could be approximated to a prayer. I remember that Samson also taught us some Christmas carols, but I would argue that even those can be classified as religious music.

There was no wonder that most of us dreaded the music lessons, and the only way we could look forward to them was to replace every significant word in a song with its opposite, or to simply replace it with moTTe (egg). No offence to any of the Gods in whose praise we were supposed to sing those songs but this was the only way we could make the lessons even remotely interesting.

I’m sure most of you would have also gone through similar experiences. And now consider this, courtesy askingfortreble:

Yeah that’s a bunch of schoolkids singing O Fortuna by Carl Orff. If you are done listening to that, then look at this – again being performed by students of the same school.

You heard right! They were singing Metallica’s Nothing Else Matters! Don’t you wish they had taught that to you in school? And made you sing it during the annual day? And if not anything else the bragging rights that would’ve given you later when you went to college? Or the coolness?

Thinking about it, Samson did teach us a couple of songs that were, in hindsight, cool. Ok we did enjoy them when he taught them to us also but they got lost in the midst of so many uncool songs that we never realized we knew such cool stuff. Harry Belafonte’s Jamaican Farewell and Dylan’s Blowing in the wind. Yeah, we learnt them in school but nobody told us they were cool.

Looking back, I wish we were taught many more such songs back then rather than having to substitute words of other songs with “motte”. For all you know, I might have actually taken up singing (ok that might be a stretch; even though I’ve learnt to play the classical violin for 6 years I hardly play it nowadays – ok that also maybe because most of the songs i know are uncool). Yeah I’m such a wannabe.

New York

So in the wee hours of this Sunday morning I’ll be off to New York for a work trip. I’ll be there for three weeks which includes one normal weekend and one long 3day weeknd. Since this is my first ever trip to the other side of the atlantic I’m really excited.

  • I’ll be living in Lower Manhattan (place called Battery Park) and my office is supposed to be 10 minutes walk away. I hope to make as good use as possible of this trip, and hopefully I’ll have fun.
  • If any of you is in or around NYC and want to meet, let me know. Apart from the weekends, we can meet up on weekday evenings also
  • Put gyaan on places to see, visit, eat, drink, experience, etc. My aim on the trip is to put as little NED as possible and try and maximize fun
  • I want to shop also. Lots of things. Let me know what things are worth buying in New York, and places to buy them.
  • I plan to buy a DSLR camera. Talking to people about it, I’m looking for a Nikon D90/Canon 50D with the kit lens. Further lens purchases will be made later. Tell me where I can buy it. People have already suggested B & H in NYC. Any other places? And since i’m there for 3 weeks i suppose I can order online also.

Was thinking about this at office today while I was printing out my tickets, acco details, etc. Insanely kicked I am about this trip. Looking forward to having a good time.

A Balance Sheet View of Life

The basic idea of this post is that interpersonal relationships (not necessarily romantic) need to be treated as balance sheets and not as P&L statements, i.e. one should always judge based on the overall all-time aggregate rather than the last incremental change in situation.

Just to give you a quick overview of accounting, the annual statement typically has two major components – the P&L statement which reflects what happened between the last release of the statement and the currrent point, and the balance sheet which reflects the position of the company at the point of time of release of the statement.

I think Bryan Caplan had made this point in one of his posts, but I’m not able to find it and hence not able to link it. The point is that you should look at relationships on a wholesome basis, and not just judge it based on the last action. The whole point is that there is volatility (what we refer to in my office as “the dW term”) and so there are obviously going to be time periods during which you record a loss. And if on each of these occasions you were to take your next course of action based on this loss alone, you are likely to be the loser.

I’m not saying that you should ignore the loss-making periods and just move on. You do need to introspect and figure out what you need to do in the next accounting period in order to prevent this kind of a loss from repeating. You will need to “work the loss”, not make a judgment to break the relationship based on it. I think a large part of the problems in this world (yeah, here goes another grand plan) stems from people using one-period losses in order to take judgments on relationships.

Another thing is not to generate the accounting statements on a shorter time period. This is similar to one funda I’d put long ago about how you shouldn’t review your investments at extremely short intervals since that will lead to a domination of the volatility term (dW) and thus cause unnecessary headache. You might notice that corporates rarely release their accounts statements more frequently than once a quarter – this has more to do with volatility than with the difficulty in generating these statements.It is similar in the case of interpersonal relationships. Don’t judge too often – the noise term will end up dominating.

One caveat though – very occasionally the last loss may be so bad that it more than wipes out the balance sheet and takes to zero (or even less) the value of the firm. In that kind of a situation, there is no option but to shut down the firm (or break the relationship) and move on. Once again, however, the clincher in the decision to break up has to be the balance sheet which has gone to zero (or negative) and not just simply the magnitude of the last loss.

Life based on a balance sheet view is a balanced life.

Lazy post: Search Phrases: March 2009

I think I’ll make this a monthly feature: collecting the whackiest search terms that people use to land up on my blog, and posting them here. I had published one such list for February. Here goes the list for March:

  • describe my job
  • apprentics for carpenter in gurgaon
  • can north indians survive in the south
  • carnatic music pakistan
  • dry fish market in orisa & madrass contact numbers
  • examples of bastardization in a sentence
  • how can death be postponed by chanting mantras?
  • kodhi is a cheap guy
  • savitabhabhi.com competition
  • verb phrases of the behavior of atticus
  • what are some other versions of dashavatar -film -songs -jobs -dvd -movie

Stud and Fighter Instructions

My apologies for the third S&F post in four days. However, this blog represents an impression of the flow of thought through my head, and if I try to time my thoughts to suit readers’ interests and variety, I’m afraid I may not be doing a very good job.

I came across this funda in one of the “sub-plots” of Richard Dawkins’s The God Delusion, which I finished reading two days back. Actually, there is another post about the main plot of that book that I want to write, but I suppose I’ll write that some other day, maybe over this weekend. So Dawkins, in some part of the book talks about two different ways of giving instructions. And thinking about it, I think it can be fit into the stud and fighter theory.

I must admit I’ve forgotten what Dawkins used this argument for, but he talks about how a carpenter teaches his apprentice. According to Dawkins, the carpenter gives instructions such as “drive the nail into the wood until the head is firmly embedded” and contrasts it to instructions which say “hold the nail in your left hand and hit it on the head with a hammer held in the right hand exactly ten times”. By giving instructions in the former way, Dawkins argues, there is less chance of the apprentice making a mistake. However, in case the apprentice does err, it is likely to be a significantly large error. On the other hand, with the latter kind of instructions, chance of error is higher but errors are likely to be smaller.

A set of “stud instructions” typically tell the recipient “what to do”. It is typically not too specific, and lists out a series of fairly unambiguous steps. The way in which each of these smaller steps is to be accomplished is left to the recipient of the instructions. Hence, given that each instruction is fairly clear and unambiguous, it is unlikely that the recipient of the instructions will implement any of these instructions imperfectly. What is more likely is that he goes completely wrong on one step, maybe completely missing it or horribly misunderstanding it.

“Fighter instructions”, on the other hand, go deep into the details and tell the recipient not only what to do but also how to do what to do. These instructions will go down to much finer detail than stud instructions, and leave nothing to the reasoning of the recipient. Obviously the number of steps detailed here to do a particular piece of work will be significantly larger than the number of steps that a set of stud instructions. Now, the probability that the recipient of these instructions is likely to make a mistake is much larger, though the damage done will be much smaller, since the error would only be in a small part of the process.

Dawkins went on to give a better example than the carpenter one – consider an origami model of a boat on one hand, and a drawing of a boat on the other. Origami gives a set of precise and discrete instructions. Drawing is as good as a set of “continuous instructions”. Dawkins talks about experiments where kids are made to play a version of “chinese whispers” using the origami and the drawing. I won’t go into the details here but the argument is that the stud instructions are much easier to pass on, and the probability of the tenth kid in line producing a correct model is really high – while in case of a drawing, there is a small distortion at each and every step, so each final model is flawed.

Stud and fighter instructions have their own set of advantages and disadvantages. Fighter instructions require much more supervision than do stud instructions. Stud instructions enable the recipient to bring in his own studness into the process and possibly optimize one or more of the sub-processes. Fighter instruction sets are so-finegrained that it is impossible for the recipient to innovate or optimize in every way. To receive a set of stud instructions, the recipient may need to have certain prior domain knowledge, or a certain level of intelligence. This is much more relaxed in case of fighter instructions.

I personally don’t like supervising people and hence prefer to give out stud instructions whenever I need to get some work done. However, there was one recent case where I was forced to do the opposite. There was this IT guy at my company on contract and I was supposed to get a piece of code written from him before his contract expired. Given the short time lines in question, and given that he didn’t have too much of a clue of the big picture, I was forced to act micro and give him a set of fighter instructions. He has ended up doing precisely what I asked him to do, the only problem being that he has  written code in an extremely inflexible and non-scalable manner and I might have to duplicate his effort since this bit now needs generalization.

I have noticed that a large majority of people, when they have to give out instructions spell it out in the fighter manner. With a large number of micro steps rather than a small number of bigger steps. And until the recipient of the instructions has got enough fundaes to consolidate the set of micro-instructions he has received into a natural set of bigger chunks, it is unlikely that he will either be very efficient or that he will produce stuff that will be flexible. It might also be the case that a large number of people don’t want to let go of “control” and are hence loathe to give out stud instructions.

In the general case, however, my recommendation would be to give stud instructions, but have a set of fighter instructions ready in case the recipient of the instructionss wants things to be more specific.

Preliminary reading on studs and fighters theory:

Studs and Fighters

Extending the studs and fighters theory