For quite some time I had been thinking to put up something on the topic. I am sure there wouldn’t be a person who hasn’t heard of the term by now. It has been a year since the buzz has been around. It has only *peaked* a couple of weeks ago with the collapse of the BIG financial giants. I’ve grown up hearing that United State’s economy being one of the most stable in the world only to find this sudden fiasco.

I tried to search for the term on Google and the definition itself spells doom!

• Look at what Wikipedia has to offer for Sub Prime Lending. The term has created such confusions that Wikipedia still has issues with the article.

• Investopedia says:

“A type of loan that is offered at a rate above prime to individuals who do not qualify for prime rate loans. Quite often, subprime borrowers are often turned away from traditional lenders because of their low credit ratings or other factors that suggest that they have a reasonable chance of defaulting on the debt repayment.”

To cut it short subprime lending is lending money to subprime borrowers (borrowers with a not-so-good credit history). To risk of default is accommodated through a higher than average interest rate.

That’s ok! But why did it result in such a big fiasco?

Well, fortunately I got an opportunity to get through a short course in financial instruments. I was amazed by the sheer complications of the various instruments floating in the markets! I guess the more complicacies one introduces, the higher is the respect in the financial community. Look at the following terms:

- ‘derivatives of derivatives’

- ‘reverse mortgage’

- ‘collateralized debt obligations’ (CODs)

Don’t they sound cool?

So tons of ultra-complicated financial instruments were made whose base was subprime loans. The complications grew so much, that no one could actually estimate the actual worth underlying these instruments. And when the borrowers started to default, everything started ripping apart like a castle of cards. Since the base of all the *exotic* instruments was these sub-prime debts, when the foundation collapsed, no one could have done anything to stop this.

What is money?

I never understand the fact that the Fractional Reserve Banking allows banks to print money by just keeping aside a meager percentage of deposits and lending out the rest. So the injection of currency is actually based on debts!!!!! The more indebted the citizens are, the more money gets injected into the country’s economy. Anyways, I am too naïve to comment further on this. There must be some rationale which I still have to understand. The following video is a MUST WATCH for anyone who wants to understand money:

Money as Debt

How is India impacted?

Fortunately, Indian bank’s exposure to such instruments is almost nil. So no direct concerns over there. However, with the US economy slowing down, some impact can’t be ruled out. I guess the whole world will have to slow down a bit. India seems to have definitely lost it’s shine as is evident through the Indian stock markets and general perception as well.

Why has everything to be so complicated? Why can’t things be simple? I guess the reason is human nature. We constantly look to challenge ourselves and in the process introduce complications. I hope things will settle down soon and people will be careful for a while. But I am sure all this will definitely manifest again in some or the other way in our own lifetimes!

It has been almost a month since I’ve put a posting. I was just wondering, was I so busy that I couldn’t spare time to write something? Or did I not have topics to write? Well, none of them hold true. I have been busier (than now) since I’ve started blogging and in the last month or so, I’ve probably been through numerous situations and experiences which warrant a post. I was just a bit too lazy to pen them down. 

I just realized that the amount of reading I’ve done in the last couple of months is actually comparable to what I’ve read in the last year or so (well by my standards. I read at my good slow pace.). I’ve travelled more. I’ve met more people. I’ve had more ideas run through my mind. I’ve watched more movies. I’ve downloaded and watched more documentaries. So all the more(s) lead to lesser blogging perhaps. I’ve posted lesser articles. I’ve read lesser blogs. 

I guess I am caught by the paradox of choice. The more you have, the difficult it becomes to choose. I have so many topics in my mind which I want to write about, but I feel I should learn more before I write. The more I read about the topic, the lesser I seem to know about it!

Ah, forget about the more and less. Bottom line is, I’ll try and post more frequently. Keep coming once a while

For quite some time I had been longing to write on this, but was looking for an appropriate example from personal experience. I got a good one a while ago.

For a backdrop; every phenomenon or activity happening in this universe has got some effect(s) on the surroundings for some time. Some effects are short-lived, while others may last indefinitely. Some are confined to a small region, while others may extend infinitely. An example of a long-lived far reaching effect would be what happened and has been happening after the Big Bang. If the Big Bang theory is correct, it may very well be the cause of everything which has happened to date. Even me writing this post is an effect of the same, though it can’t be co-related directly. Without explaining any further I propose the following theory:

“The universe is interwoven in a fabric of causes and effects where a particular event could be a cause or an effect depending on our frame of reference and the set of events considered within that (the frame of ref.).”

Cut it to the experience I wanted to share. I was working on a Blackberry project a while ago. The application was going on pretty well until, just a couple of days short of a critical release, we discovered that it doesn’t work on the Blackberry Pearl! The reason for this conclusion was the fact that the application failed on 3 different Pearls handsets. Just to mention I couldn’t test it out myself on  Pearl as I didn’t have it handy during that period. With the release pressure, I spent no stone unturned to figure out if Pearl didn’t support anything specific we were using in the application. Of course I was not to find any concrete answer to this as I had completely misdiagnosed the problem.

So what was it which was making the application fail on Pearls? Well we took a step back and tried to think as to what all could cause this. Suddenly it struck that could it be the OS version in those devices? We quickly ran a check, only to figure out that coincidently all the Pearl devices on which the application was tried  had an earlier version of the OS which we never intended to support. Upgrading the OSes did the trick.

This is just an example of misdiagnosing an effect as a cause. In this case the OS was the cause of the application not running on it. Just that it manifested through the Pearl. I took a big lesson out of this. A problem may manifest in various ways all of which are effects and not the cause. It is important to take a step back, and think through the artifacts available to be able to figure out the cause. Many a times, I’ve ended up spending more time on eliminating the effects as opposed to getting down to the root cause and eliminate it. No matter how hard you try to suppress the effects, things will keep troubling unless the cause is eliminated.

Easier said than done! Sometimes it is virtually impossible to discriminate between the effects and the cause(s). What if there are multiple causes?

Consider this:

“A study suggests that 78% of men who have lung cancer have an ash-tray at home.”

Does that mean ash-tray causes lung cancer? Well, obviously not. In this case we can easily make out that it is smoking which could be the cause (of both cancer as well as the ash-tray being at home). However it is not so simple to deduce this always.

Is there a trick to get down to the cause?  Well, I don’t have a specific answer to this. It is embedded in human nature to get rid of the trouble as soon as possible, which prevents us from the appropriate diagnosis. Most of the time we try to suppress the effects.

Before I sign-off on this one, just wanted to emphasize that the dilemma exists in every aspect of our lives, whether personal or professional. While some uncertainty would still be there, it’s worth taking a step back to review when we are next stuck at such a situation and try to indentify the cause rather than supressing the effects.

It has been some time since I wanted to write on this. I held myself off this to ensure I don’t over react and put in something out of frustration. Usually, I have a lot of patience and don’t lose my cool easily but there’s something which has been bugging me for some time.

It is about undisclosed expectations. Now what’s that? I’ll have to build up a story around that. Let’s assume that there’s a kid in your neighborhood. You’ve got a family and there is a kid in your family as well, but he is too small to the world outside. You come to know of the neighborhood kid, meet him and somehow like him. Luckily you’ve got a chocolate with you and you give it to him. A couple of days pass, and by chance, you meet your little friend while taking an evening walk in the adjoining park. He greets you and and this time you offer him a chocolate again. Days pass on, and it becomes a sort of a routine. You buy chocolates for the neighborhood kid, slowly more because of an obligation rather than anything else. On the other hand, the kid has developed a shuttle expectation within himself, that you’ll offer him chocolates whenever you meet him. The kid has grown up, and so have the expectations. You think, now that the kid has grown up, probably he doesn’t need chocolates anymore. You’d rather give those to the kid at home, who has grown up enough to try out the chocolates now. You stop giving chocolates to the neighborhood kid and reserve them for home.

What happens now? In all probability, the neighborhood kid would start feeling uneasy and react. He would probably not think of all those days you’ve offered him chocolates, but will definitely react to the situation at hand. Assume that you can afford to give chocolates only to one kid. That makes it straightforward to be the kid at home rather the one in your neighborhood. You don’t really like the neighborhood kid’s reaction. Though he can’t claim those chocolates on you, he’ll show his resentment in one or the other ways. That makes you annoyed. You think you offered him the chocolates all these days you could, and now that the kid in your family needs you’ve just switched the attention. You think why should the neighborhood kid react like this?

In the above fabricated story, who is to be held responsible for the situation? You for offering chocolates initially and then pulling off? Or the kid for not acknowledging the fact he got chocolates out of nothing for all those days and should not complain for something which was never a norm?

Well he was just a kid! If you do this to the eldest of people, the situation is not going to improve. It is a human tendency to take things for granted, if they happen on a regular basis. We are bound to complain if it goes missing, even if it never belonged to us. It takes a lot of guts to happily acknowledge the fact that losing something which never belonged to you is not a loss at all! Why to complain? It was a bonus anyway. You can’t hold anyone responsible for not offering the bonus consistently.

It has happened to me is some way. It turns out that to avoid such situations, one should not stretch beyond limits on a regular basis. It sets that ‘Undisclosed Expectation’ which is very difficult to break. The ‘delta’‘ or the additional effort you put in should never be comparable to the ‘mainline’ effort. The undisclosed expectations could be very dangerous. Since one just can’t force this upon, they tend to react in unjustified ways.

Notes to myself: If I have to avoid setting ‘undisclosed expectations’ , I need to make a deliberate effort not to stretch beyond the comfort zone . Else, I’ll be in trouble. Anything which is within the comfort zone is fine, even it has some ‘delta’

Witnessing the IT-BHU alumni meet for the first time since I graduated, was like getting back in time. And I am not only referring to the time while I was studying over there, it was much much beyond that! Listening to a couple of senior alumnus sharing their memories of college times was nostalgic.

I was amazed at the timespan which got covered with the representation. We had alumnus right from 1930’s to 2000’s! Now that’s 8 decades of graduates collected under a single roof. Isn’t that amazing? Great feeling to be associated with an institution with such a glorious and extended past.

Another welcome change was to get acquainted with some of the exceptional achievements by distinguished alumnus in various industries. Though I had never met them, nor did I know much about most of them before yesterday, just being associated with the same institution as them was such a proud feeling. Moreover, their affinity to the institution was far greater than what I see in myself.

I guess it is fairly important to realize the impact an institution can make. While there’s no doubt that a great institution like IT-BHU can provide with the best of education and opportunities while one is enrolled there, the biggest mistake which most of us seem to make (and I was making too) is to ignore the impact an institution could have beyond graduating out of it. More important than anything else which shapes our careers at such institutions is the presence of competent and intellectual batchmates either through competition or support. Nevertheless, what matters is the strong networking opportunity one gets out of the institution. As a matter of fact, whatever is taught at any institution can easily be inculcated sitting at home through books and various modes of education available these days. But what can not be achieved sitting at home is the networking aspect.

There are specific organizations running across the globe whose sole purpose is to provide networking opportunities. And that too at premium charges! While they do have their importance, I believe much can also be achieved by alumni meets which not only give similar opportunities, but also strengthens the bonds which seem to be slowly fading away after we graduate.

Photos