Tag: signature

Borrowing chip and pin credit cards

Just before she left for school on Friday, the wife told me that her debit card was in a certain drawer in her cupboard, and I should use it in case I wanted to go out. She told me the PIN and said that I could wish to draw money from the ATM downstairs if necessary, or simply swipe the card wherever I go.

I’ve always been queasy about borrowing or lending credit/debit cards. I’ve always thought that it’s illegal to use someone else’s card, even with their consent. The traditional way a credit/debit card works, your signature on the charge slip is supposed to be compared to the signature on the back of the card, and the merchant can refuse you service if the two don’t match (this is seldom implemented in India, but that’s the theory). For that reason, if i were to use the wife’s credit card and the waiter sees that the signature on the charge slip doesn’t match that on the card (obviously!), it might lead to an embarrassing situation.

For this reason I ended up withdrawing a significant amount from the ATM and using the cash thus withdrawn for my expenses. Looking at credit/debit card swipes in action later on, however, I was wondering if it was actually necessary to do so.

In Europe, like in India (Europe is the leader, India followed; US has no plans to follow it seems), all credit and debit cards are chip-and-PIN based cards. The credit card is not swiped in the terminal, but instead is inserted in a way that the terminal can read an embedded chip (more secure than the magnetic stripe). To this, you enter a four-digit PIN, which acts as the validation after which the charge gets approved. Typically, after you’ve approved a transaction with your PIN, a signature is not required, though in India they insist on it (despite the charge slip saying “PIN verified; signature not required”).

And that is what I’ve noticed here in Spain ever since I withdrew money from the ATM that day – there is no requirement for signature in any transaction. The waiter (let’s say we’re at a restaurant) brings the swiping machine, you enter the card, the waiter enters the amount and you enter your PIN, and out comes the slip and the waiter hands back the card to you and walks away. No signature! And this is standard practice across all debit and credit card terminals!

A possibly unintended advantage of this is that it’s now possible to borrow (with permission) someone else’s credit or debit card and actually use it!

Mike Denness and WTC Bombers

Professors who are insecure with respect to their ability and competence demand, rather than command respect. They institute complicated procedures which ensure that students need to suck up to them. Professors who know they are good don’t care. For example, the better professors who taught me at IIT never took attendance (everybody would be marked present), and would yet lecture to a full house most of the time. Lesser professors would get finicky about attendance. And other such trivial things. By forcing students to do things in a certain way, by “being strict”, they assumed, that students would respect them. It is a wonder that none of them thought this might be counterproductive.

In our third semester at IIT, we had this course called “Digital logic and VLSI Design Lab”. It was a decent and useful course. You would build digital circuits and test them out. No rocket science to it, but something that was useful in the long run. And because there was no rocket science to it, the faculty (one of the more insecure professors) had instituted a complicated process so that he gets some respect (or attention at least). Actually it wasn’t that complex. Before an experiment, we had to write up about the circuit and how we go about the experiment and get his signature on our write up. The lab assistant had been instructed that we should be issued components only after our report had been countersigned by the professor. Nothing too complicated, but a small step to ensure we suck up to him.

Things were mostly smooth, but one day the professor was late to arrive. Or maybe he was there and we didn’t see him – I don’t remember correctly. I don’t know how it happened but we managed to get the components from the lab assistant without our report having been countersigned by the professor. In a jiffy (after all we were three bright IIT boys) we had finished the experiment. And we called the professor to show him the results.

The experiment didn’t matter to him. He didn’t care one bit about the elegant circuit we had constructed. He only looked at our write up. His signature was missing. And he went wild. I won’t get into the details here but he went absolutely ballistic and threatened to annul our experiment, and possibly even fail the three of us in that course. “Such indiscipline is not to be tolerated”, he said.

“Sir, but this is not fair”, a teammate interjected. It only ensured that the professor went even more ballistic. “You guys must be reading the newspapers”, he thundered. “You see what is happening in South Africa? Is that fair? There is absolutely no fairness in this world, so you won’t get any brownie points by arguing that something is not fair” (the professor was a big cricket fan. The events in South Africa pertained to the one match suspension of Virender Sehwag and a suspended sentence to six other Indians, handed out by match referee Mike Denness).

“I don’t want my students to be this indisciplined”, he went on. “You never know where this will take you, if it is not nipped in the bud. One day you will do your experiment without taking my signature. When that is tolerated, you get encouraged to more indiscipline. And so it grows. And one day you will be bombing the WTC”. None of the three of us was able to react to this (this was in October 2001).

I don’t exactly remember how it ended. If I remember right, we had to dismantle our set up, take the professor’s signature on our write up, re-issue the components and re-do the experiment – but I’m not sure – maybe we were let off. But it was an important lesson for us – if indiscipline is not checked right up front, you could go on to be a terrorist it seems!

Discharge procedures

Earlier today, I had gone to help out a relative who had been admitted to hospital, and who was getting discharged today. The procedure was bizarre, to say the least.

A little before noon, a nurse walked into the room announcing that the discharge formalities were being put in place, and asked us if we had insurance cover (we didn’t). She reappeared five minutes later in order to remove the thing through which the intravenous drip and medicines had been administered. We thought it was time for us to leave, and informed people at the relative’s home to get lunch ready. What we didn’t know was that the “release” process would take nearly three more hours.

Every few minutes, I would walk up to the nurse station on the floor, and ask them when the discharge would happen. For the first one hour, they would tell that the bill would be ready “in ten minutes”. Finally I lost patience (my loss of patience doesn’t exactly make me an appropriate choice of personnel to manage discharge, I know) and asked them to direct me to the person who was actually preparing the bill. The bill was ready a minute after I appeared in front of that person, and it had been settled in the next five minutes.

A word here about the billing procedures. The relative’s ward was on the fifth floor, and I went down to the basement (“floor minus two”) to the billing section where I got the bill. I had to then take the bill and walk up to the ground floor to the cash section to make the payment, and once again take the receipt back down to the basement to get a printed bill.

Anyway, I thought most of the ordeal was done and proudly announced to the nurses at the nurse station that the bill had been cleared and they should let us go. But the discharge summary remained, and for the next hour or more, they said it would be ready “in the next ten minutes”. And once it was done, a nurse had to run down to the basement (yet again!) to collect it and get the signature of the doctor on duty. And run back up six floors (in another bizarre policy, hospital staff are forbidden from using the elevators!).

Then there was the set of prescriptions that were delivered to us regarding the medicines we had to buy for the following one week (and I’ll write a separate post on drugstores located within hospital premises). This wasn’t the first time I was helping someone get discharged, and this wasn’t the first time the discharge process took this long. From my own anecdotal experience, and from that of other relatives who I was talking to today, this is more the norm than the exception.

This makes me wonder why most hospitals, without fail, have such screwed up discharge procedures? Is this a matter of such low priority that all hospitals can consistently choose to ignore it? It is not like the amount of work that needs to be done is immense, so I wonder what prevents hospitals from streamlining the procedure? Or, like some hotels do, fix a discharge time so that they can batch process the procedures?

The problem, in general, with people in businesses that makes them feel noble, I tell you, is that they are not willing to heed to advice. And are not willing to question themselves enough. The nobility of their profession, they believe, places them too high to deal with mundane trivialities such as time taken to discharge a patient! And I’ll write a separate post soon on people in noble professions.

Intellectual Property

A blog post earlier this month on Econlog finished off with a very strong quote by Friedrich Hayek:

One of the forms of private property that people cherish most is their ideas. If you convince them that their ideas are wrong, you have caused them to suffer a capital loss.

I ended up liking it so much that I added it to my work email signature. Thinking about it further, why is it that some people are more open to debate than others? Why do some people admit to their mistakes easily while others are dogmatic about them? Why do some people simply refuse to discuss their ideas with other people? I think Hayek’s observation offers a clue.

Let us consider two people – Mr. Brown and Mr. Green. Mr. Brown believes in diversification, and his investments are spread across several financial instruments, belonging to different categories, with a relatively small amount of money in each of them. For purposes of this analogy, let us assume that no two instruments in his portfolio are strongly correlated with each other (what is strong correlation? I don’t know. I can’t put a number on it. But I suppose you get the drift)

Mr. Green on the other hand has chosen a few instruments and has put a large amount of money on each of them. It is just to do with his investment philosophy, which we shall not go into, as this is just an analogy.

Let us suppose that both Mr. Brown and Mr. Green held Satyam stock on 6th January 2009. They were both invested in Satyam according to their respective philosophies – and the weightage of Satyam in their respective portfolios was also in line with their philosophies. The next day, 7th of January, the Satyam fraud came out. The stock crashed to a tenth of its value. Almost went to zero. How would our friends react to this situation?

Mr. Green obviously doesn’t like it. A large part of his investments has been wiped out. He has become a significantly poorer man. For a while he will be in denial about this. He will refuse to accept that such a thing could happen to one of his chosen stocks. He will try to convince himself that this fall (a 90% fall, no less) is transient, and the stock will go back to where it once was. As days go by, he realizes that his investments have been lost for ever. He is significantly poorer.

Mr. Brown will also be disappointed by the fall – after all, he too has lost money in the fall. However, his disappointment is mitigated by the fact that the loss is small compared to his portfolio. There have been other stocks in his portfolio which have been doing well, and their performance will probably absorb the Satyam losses. Some of the stocks in his portfolio may also be fundamentally negatively correlated with Satyam, which means they will now gain. There is also the possibility that the Satyam fall has opened up some new possible areas of investment for Mr. Brown, and he might put money into them. It is much easier for Mr. Brown to accept the fall of Satyam compared to Mr. Green.

So you replace stocks by ideas, and I suppose you konw what I am gettting at. The degree of openness that people show with respect to an idea they have varies inversely with the share of this particular idea in their “idea portfolio”. The smaller the proportion of this idea, the lesser will be the “capital cost” of their losing the idea. And hence, they will be more open to debate, to discussion, to letting someone critically examine their ideas. If the proportion of this particular idea in their overall portfolio is large, there will obviously be resistancce.

A corrolary of this is that when someone possesses a small number of ideas they are more likely to be dogmatic about them (I am using the indefinitive “more likely” here because even when you have a small number of securities in your portfolio, your exposure to some of them will be really small and so you’ll be less unwilling to lose them. Though I must point out that people with small ideas portfolios become so used to madly defending the big ideas in the portfolio that they start adopting the same tactic for the smaller ideas in their portfolio and become dogmatic about them – which is irrational).

I just hope I didn’t cause you a capital loss by writing this. For me, on the other hand, this was a bonus stock.