THE GREATEST 'LOU" SONGS OF ALL TIME

The entire country has been abuzz with news of the loan fraud committed by a certain Mr. Modi (no no...not the 56-inches one!).

For the uninitiated, Mr. Nirav Modi (NiMo), a renowned diamantaire, defrauded the Punjab National Bank to the tune of a whopping Rs.11,600 crore (who comes up with these numbers??) by conniving with a few bank officers to fraudulently obtain Letters of Understanding (LOU), also known as bank guarantees, way back during 2009-11. These were then used to make payments to overseas suppliers. And then, one fine day, everyone realised that he was going bankrupt, thereby putting his own bankers and the bankers of all his suppliers at risk of default.

In a nutshell, NiMo took abused the bank's 'Unconditional LOU' and painted the whole town red a la the Boulevard of Broke-n Dreams.

Sources (absolutely unreliable, of course) tell us that the defrauded banks have all come together for an initiative that they think might help them recover part of the dues. So what is this initiative, you might ask. Presenting, the most fool-proof, lucrative and entertaining initiative possible....*drumrolls*

A MUSIC ALBUM, what else?!

And may I add, the initiative is not juts Digital, but also Cashless (see what I did there? *Wink*Wink*.)

Understandably, the music album is introspective, in that it is centred around the 'LOU-story-gone-wrong' theme. It has some distasteful and detestable catchy and alluring tracks.

Of course, banker's might be the most creative creatures when it comes to interest rates and hidden charges, but they're absolutely hopeless when it comes to composing songs of their own. Therefore, it should not come as a surprise to you that all the tracks in the album sound eerily similar to some very famous songs.

Some of the best tracks in the album are:-

1. I Wanna Know What LOU Is (Inspired by Foreigner's I Wanna Know What Love Is)
This is how it all began...Bank meets NiMo, NiMo meets Bank, NiMo gets flirty, Bank plays along, then NiMo plays a little hard-to-get, Bank pursues, NiMo gets overtly curious about LOU, and we have the recipe for the first track!

2. Take A Chance On Me (Inspired by ABBA's famous song with the same title)
NiMo finds LOU to be the perfect means to implement his nefarious plans. So he woos the Bank and subtly makes a gutsy invitation to other potential suitors as well.

3. Cheap Frills (Inspired by Sia's Cheap Thrills)

NiMo lies through his gutka-stained teeth throughout this track. He keeps insisting "I don't need no money", when that's exactly what he's wanted right from the start.

4. Nothing's Gonna Change My LOU for You (Inspired by Glenn Medeiros'....you know which song, right?)

So the Bank falls for NiMo's charms and finally gives him the LOU he wants and promises to stand by him, even through the worst of times. Sucker!

5. LOU Will Keep Us Alive (Inspired by a song by The Eagles)

Like the Eagles original, a cheesy track. Quintessential lovey-dovey song for couples in their early days.

6. Crazy Little Thing Called LOU (Brazenly copied from a Queen classic)
NiMo eventually realises that LOU is no cheap frill after all. Sample the lyrics -  "This thing called LOU, I just can't handle it, This thing called LOU, I must get round to it, I ain't ready, Crazy little thing called LOU." Too late!

7. Have I Told You Lately That I Owe You? (Shamelessly lifted from a Rod Stewart song)

NiMo finally begins to realise that he's goofed up big time. Guilt forces him to ask the Bank a seemingly innocent and harmless question.

8. I'm So Loan-ly (Shockingly similar to Bobby Vinton's Mr. Lonely)

One more song from NiMo's point-of-view. Guilt-laden or cocky? You decide!

The lyrics go - "Loan-ly, I'm So Loan-ly, Ain't Got No Money, And Now I've Flown!"

9. When You Pay Nothing At All (Ronan Keating wants his royalty cheque)

NiMo fails to service his debts. The Bank doesn't even get faux diamonds. They get nothing at all!

10. You Give LOU A Bad Name (Bon Jovi don't mind...any publicity is good publicity they say)

The Bank finally loses its patience and goes metal-thrashing-mad on NiMo. The lyrics say it all - "Shot Through The Heart, And You're To Blame, You Give LOU A Bad Name, I Played My Part, But You Played Your Game, You Give LOU A Bad Name".

So there you have it folks. Hope you liked the tracklist as much as I did. There are rumours that Banks might also consider releasing a book titled 'Default in Our Stars' in case album sales don't pick up, but I urge you not to pay attention to loose talk.

I humbly request you to treat this information as confidential. And in case you find it hard to keep secrets, please direct those interested in buying the album to me. I could do with some extra income, now that there's news that Indian corporates won't be giving out good hikes this year either.

A big thank you to Purba Ray for having inspired this write-up. Her satirical post titled "2018, A LOU Story" is absolutely hilarious. Go read it! 

Cheers,

CRD

OF HOLY WATER AND CRYPTOCURRENCIES

Holy Water definition - (noun) Water that has been blessed by a priest for use in "symbolic" rituals of purification

A month ago, I found out that the babysitter had been giving Holy Water to our 3-year old. A devout Catholic and extremely fond of our lad, she was upset about him getting unwell very often, and so she reckoned that it was only wise to have sought a little divine intervention to help him stay safe. Needless to say, I was left aghast. Make no mistake, I am not an atheist. But in today's age of science and technology, it is kinda silly to seek recourse to religious (and largely symbolic) articles, instead of medicine. Moreover, it would have probably been acceptable if the water was fresh - holy water is usually distributed during Easter, which means that the water is usually stored for almost a year before it is changed. The philosophies behind religious symbolism are not commonly understood.

Speaking of things that are not commonly understood, there's something else that's setting the popularity charts ablaze in the world of investment, and yet is very poorly comprehended. Say hello to cryptocurrency!

One of the most popular descriptions of cryptocurrency is 'a form of digital money that is designed to be secure and, in many cases, anonymous.' It is a currency associated with the internet that uses cryptography to track purchases and transfers. The first cryptocurrency was bitcoin (2009) and to date it remains the most popular. Since then, a plethora of cryptocurrencies have made an appearance over the past decade, with more than 900 now being available on the internet.

Contrary to the name, however, cryptocurrency has not yet gained acceptance as legal tender. Till date, Japan remains the only large economy to have officially recognised cryptocurrency (bitcoin) at par with fiat currency. Although many countries do consider cryptocurrencies as legal, most of them only consider them as a trade-able commodity or as property for tax purposes. In fact, some countries like China, South Korea, Hong Kong and Britain, among others, have all moved to either ban or restrict the use o cryptocurrencies. Closer home, the RBI had made known its position on bitcoins by stating that they were not to be used for payments and settlements, although the use of the underlying blockchain technology could be explored.

What is it that makes economies wary of using cryptocurrencies as legal tender? Let’s see how cryptocurrencies match up against the generally-accepted characteristics of a currency: -

• Fungible – Advocates of cryptocurrencies vouch for their high fungibility on the basis of the argument that digital 1s and 0s that represent units of bitcoin on the blockchain are absolutely like each other. However, cryptocurrencies are not really fungible in the traditional sense. Some bitcoins, for instance, are not clean, in that they leave a trace on the blockchain. In such a scenario, clean bitcoins tend to command a better price than their counterparts. Moreover, it is possible for service providers or exchanges to blacklist specific bitcoin wallet addresses, which would then render any transactions with such bitcoins worthless. The tracing and monitoring of cryptocurrencies, therefore, does not make it any more fungible than fiat currencies.

• Non-consumable – Bitcoins, being virtual currency, are inherent non-consumable, and possess value in themselves. Like fiat currency, they can be used to procure other commodities/services, without being used themselves, unlike commodities like gold and diamonds.

• Portable - It can be argued that cryptocurrencies are easy to transport/transmit and literally weigh nothing. In fact, it comes with its own global teleportation system. However, it is worthwhile to consider the fact that heavy investment and a great degree of skill is required to keep digital money secure. Also, since cryptocurrencies are decentralised and unregulated, there is absolutely no hope of remedy or legal recourse in case hackers make away with your cryptocurrency. To cut a long story short, cryptocurrency once lost is truly lost forever.

• Durable - Cryptocurrencies edge out fiat currency and precious metals when it comes to durability. However, there is the risk of a huge problem in case you lose the private key. Imagine a crashed hard drive - this is not necessarily a remote possibility.

• Divisible - Cryptocurrencies score high on the divisibility parameter. Bitcoins, for instance, are divisible down to 8 decimal places (1 Satoshi = 0.00000001 BTC).

• Secure - Being in digital form does not make cryptocurrency any more secure than physical assets. In fact, it probably is even tougher to secure something that is virtual and extremely vulnerable to attacks from hackers.

• Easily Transactable - Being decentralised, cryptocurrencies require absolutely no intervention by middlemen and are not bound by bank branch office hours. This makes them theoretically low-cost and easily transactable.

• Scarce - Most cryptocurrencies have designed to be limited in number. Hence, in the long run, they are scarce. Physical assets derive their intrinsic value from a combination of their scarcity and their utility outside the purview of currency. In the case of cryptocurrencies, they have no other use apart from that of a currency. However, it must be noted that bitcoins can be mined (it serves as a price discovery mechanism). Thus, it is their scarcity and mine-ability that determines their intrinsic value.

As we can see, cryptocurrencies have their sets of pros and cons vis-a-vis fiat currencies and physical assets. However, the pace at which bitcoin prices have risen in the past year alone sets warning bells ringing. It would not be unfair to say that the phenomenon of rising prices of cryptocurrencies point towards a bubble in the making.

Some aspects that add to the skepticism are: -

• The fact that cryptocurrencies are traded anonymously means that they are traded in an ecosystem that is largely shrouded in mystery

• The decentralisation and lack of regulation makes systems like the blockchain a highly risky and potentially investor-unfriendly place

• There seems to be a great gap between the intrinsic value of cryptocurrencies and the prices they command; what's worse is that this gap is impossible to quantify, unlike in the case of physical assets

• Unlike commodities, investors do not really have anything to hold at the end of a transaction. At least in the case of physical assets, investors can hope to cut their losses by salvaging some value through the sale of an asset that has lost its value. In the case of cryptocurrencies, there is no middle path; it's usually 'all or nothing'.

• In this market, the innovators and early adopters have made huge gains, Late adopters and laggards stare at the possibility of humongous losses in case cryptocurrencies end up failing or turn out to be a widespread fraud like some detractors fear that they might be

In conclusion, I think that unless investors possess the kind of money to purchase infrastructure capable of mining cryptocurrencies and keeping them secure from the threat of hacking and system crashes, they should avoid cryptocurrencies like the devil avoids holy water.

Speaking of Holy Water - last week I saw the babysitter making my son drink holy water yet again. 

This time though, I smiled nonchalantly...because every morning since the past month, I have been refilling the bottle with RO-purified water.

INDIA'S DEMOGRAPHIC HANDICAP

A UN forecast tips India to surpass China in terms of population by the year 2024. The same forecast estimates that the Indian population could cross 1.5 billion by 2030. To put this in perspective, India and China will together have accounted for almost 38% of the world population by then. But while China's national agenda seems to have given significant focus to population control, India's efforts in this direction thus far have been perfunctory at best. There was a time when large families were considered a blessing because 'many hands make light work'. However, in current times of over-stressed resources, drying investments, dearth of job creation and human jobs being threatened by artificial intelligence, a rapidly rising population could mean a looming crisis.

Only a few months ago, India had surpassed China to emerge as the 'fastest growing large economy'. However, the economy is currently in a tailspin, grappling with high inflation, poor consumer demand, lower private investment and stagnation in exports, among other worrying factors. The demonetisation of November 2016 and the seemingly poorly implemented GST are likely to have given rise to significant uncertainties pertaining to growth, inflation, liquidity and the banking system in the country, at least in the short to mid term. Consequently, there are concerns that GDP growth is likely to drop by at least two percentage points. Some economists opine that a drop of one percent of the GDP leads to the loss of about one million jobs. And worryingly so, a survey conducted by economic think-tank Centre for Monitoring Indian Economy estimates that roughly 1.5 million jobs have been lost between January and April 2017.

As per a UN report, the size of the Indian working-age population increased by 300 million between 1991 and 2013, while the number of employed people increased by only 140 million. In China, the number of jobs grew by 144 million between 1991 and 2013 for a 241 million rise in the working-age population. The relative inability of the Indian economy to generate sufficient employment signifies a serious challenge given the continued expansion of the workforce in India. As per media reports, this situation has worsened ever since, with merely 1.35 lakh new jobs having been created for the 12 million people that entered the workforce during that period. Although the government had initially promised to create one crore jobs per year, one of its pledges for 'New India', as listed on the PM's website wants citizens to be "job creators rather than job seekers".

The Centre has now indicated that they might release a stimulus package to boost the economy and help create more jobs. Needless to say, this needs to be done quickly; the spurt of layoffs being witnessed in the recent months is alarming. Without a quick and sustainable remedy to the looming crisis, India's potential demographic dividend will be rendered a colossal 'demographic handicap'.