Tag: model

Bangalore Book Festival

So today I made my way to Gayatri Vihar in the Palace Grounds to visit the Bangalore Book Festival, on its last day. It was interesting, though a bit crowded (what would you expect on the last day of an exhibition? and that too, when it’s a Sunday?). I didn’t buy much (just picked up two books) given the massive unread pile that lies at home. However, there was much scope for pertinent observations. Like I always do when I have a large number of unrelated pertinent observations, I’ll write this in bullet point form.

  • There were some 200 stalls. Actually, there might have been more. I didn’t keep count, despite the stalls having been numbered. Yeah, you can say that I wasn’t very observant.
  • All the major bookshops in Bangalore barring the multicity ones had set up shop there. I don’t really know what they were doing there. Or were they just trying to capture the market that only buys in fairs? Or did they set up stall there just to advertise themselves?
  • It seems like a lot of shops were trying to use the fair to get rid of inventory they wanted to discard. All they had to do was to stack all of this on one table and put a common price tag (say Rs. 50) on every book in that collection, and it was enough to draw insane crowds
  • One interesting stall at the fair had been set up by pothi.com an online self-publishing company. I’ll probably check them out sometime next year when I might want to publish a blook. Seems like an interesting business model they’ve got. Print on demand!
  • I also met the flipkart.com guys at the fair. Once again, they were there for advertising themselves. Need to check them out sometime. Given the kind of books I buy, I think online is the best place to get long tail stuff.
  • There was an incredibly large number of islamic publishing houses at the fair! And have you guys seen the “want qur an? call 98xxxxxxxx for free copy” hoardings all over the city? Wonder why the Bajrang Dal doesn’t target those
  • There was large vernacular presence at the fair. I remember reading in the papers that there was a quota for Kannada publishers, but there was reasonable presence for other languages also, like Gult, Tam, Mellu, Hindi
  • A large number of stalls were ideology driven. Publishing houses attached to cults had set up stalls, probably to further the cause of their own cult. So there was an ISKCON stall, a Ramakrishna Mutt stall, a Ramana Maharshi stall, etc.
  • Attendance at most of these niche stalls was quite thin, as people mostly crowded the stalls being run by bookstores in order to hunt for bargains. Attendance was also mostly thin at publisher-run stalls, making me wonder why most of these people had bothered to come to the fair at all.
  • I saw one awesomely funny banner at the place. It was by “Dr Partha Bagchi, the world leader in stammering for last 20 years” or some such thing. Was too lazy to pull out my phone and click pic. But it was a masterpiece of a banner
  • Another interesting ideological publisher there was “Leftword books”. Their two sales reps were in kurtas and carrying jholas (ok I made the latter part up). And they were sellling all sorts of left-wing books. Wonder who funds them! And they were also selling posters of Che for 10 bucks each
  • I wonder what impact this fair will have on bookstores in Bangalore in the next few days. Or probably it was mostly the non-regular book buyers who did business at the fair and so the regulars will be back at their favourite shops tomorrow.

I bought two books. Vedam Jaishankar’s Casting A Spell: A history of Karnataka cricket (I got it at Rs. 200, as opposed to a list price of Rs 500) and Ravi Vasudevan’s “Making Meaning in Indian Cinema”.

Taleb’s Recipe

No, unlike the previous post, this has nothing to do about food. It is about Nassim Nicholas Taleb’s recent op-ed in the Financial Times where he gives his “recipe” for saving the global financial system. Two of my favourite bloggers Arnold Kling and Felix Salmon have responded to it, but I didn’t like either so I thought I should post my response as well.

I borrowed The Black Swan from Aadisht sometime in late 2007. I tried starting to read it several times but never got past Taleb’s childhood stories of his hometown Amioun. I took a couple of months to get past the first 50 pages, I think. And then it was easy reading. I loved the sub-plots. I broadly bought into the main plot. By the time I had finished reading the book, I wanted to ask Taleb to accept me as his sisya. I  bought and read Fooled By Randomness, and liked that too. And then decided to read The Black Swan yet again. It was only a couple of months back that I finally returned the latter book to Aadisht (in the meantime he had bought two other copies of it, and read it).

Till very recently, I would read up any article of Taleb’s that I could find. I wrote to him a couple of times with my CP, and he even responded. I infact wrote to him about “Positive Black Swans and the World of Romance” and he responded with a “Thanks Karthik, Ciao, Nassim”. I had become a worshipper.

However, now I think he’s kinda lost it. I don’t think he intends to write another book and so he has nicely settled down to peddling his last theory (black swan). In response to a recent post on studs and fighters, Kunal had said, “He that is good with a hammer tends to think everything is a nail.”. The same disease affects Taleb I think, as he goes around the world trying to force-fit his black swan model to every conceivable problem.

And then I have a problem with people like Taleb and Satyajit Das, and actually with all those ibankers who are asking for bailouts. These guys made full use of capitalism, and made heaps of money, when things were good. And now that their money has been made, they call for government intervention, and socialism. Taleb and Das are different from the other wall streeters because they are calling for full-scale government intervention, unless the other bankers who are only calling for a bailout!

Now that the elaborate intro is done, let us get to the point. Taleb’s essay consists of ten points. The headings are italicized and there’s a detailed explanation. For purpose of brevity I’m putting only the headings here, and writing my comments after each of them. Go to the FT site to read the full points that Taleb has written.

1. What is fragile should break early while it is still small.

I agree with this. And my take is that competitors need to keep each other in check. For example, if this round of bailouts were not to happen and the biggies were let to fall, no one would grow so big in the future, and even if they did, they would make sure that they were insulated enough from one another. This round of bailouts will make the next crisis (whenever it will happen) worse.

2. No socialisation of losses and privatisation of gains.

Agree with this.

3. People who were driving a school bus blindfolded (and crashed it) should never be given a new bus.

Taleb has clearly not learnt his own lessons (fooled by randomness). I might have crashed the school bus once, but it may not be my mistake. the one data point of one bus crash should not be used to decide my career as a driver. One should look at how the driver drove before the crash to determine whether he gets a second chance. Blanket banning of people involved will not help.

4. Do not let someone making an “incentive” bonus manage a nuclear plant – or your financial risks.

It’s all about structuring. Taleb was a trader and he forgets about structuring. As long as incentives of the employee and the employer are reasonably well aligned, there is no problem with an incentive bonus. The problem in ibanking was that too much emphasis was placed on short-term performance of employees. It’s tragic that the fall of the financial system has brought to an end what was an excellent compensation system (in principle, mind you; not the way it was practised) – where each person was paid fairly based on his/her contribution.

5. Counter-balance complexity with simplicity.

I think the simplest way would be to leave things to the market. Government intervention would lead to a new form of complexity, and in the overall scheme of things increase complexity rather than decrease it. None of the stuff that Taleb has mentioned is easily implementable.

6. Do not give children sticks of dynamite, even if they come with a warning .

Again Taleb prescribes mai-baap sarkaar. Does he realize that if governments had always had tight control over the markets, the markets wouldn’t have crashed on October 19 1987, and he wouldn’t have made any money? (Taleb has reportedly made 97% of his life’s earnings out of this one event). What is “complex derivatives”? And how can you ban it? If you ban it, it’ll go to the black market. You are better off collecting hefty security transaction tax.

7. Only Ponzi schemes should depend on confidence. Governments should never need to “restore confidence”.

I agree

8. Do not give an addict more drugs if he has withdrawal pains.

Agree once again. We need to structurally change things to get to saner leverage than what was practised 1-2 years back. Regulations should be simple and principles-based, minimizing chance for regulatory arbitrage. Remember that the purpose of creation of most “complex derivatives” in the last 25 years is regulatory arbitrage.

9. Citizens should not depend on financial assets or fallible “expert” advice for their retirement.

Bullshit. The point on markets not containing information, that is.

10. Make an omelette with the broken eggs.

None of this makes any kind of practical sense. It’s just an old man ranting. Thanks, guru (pun intended).