The Ants and the Grasshoppers

28.5.10

An interesting analogy caught our eye this morning. We all have been brought up on a healthy dose of the 'ant and the grasshopper' story as kids in school. The story ends quite vividly. Winter comes, and the ants thrive on the resources they have worked hard to collect all summer. The grasshopper, for all his frolicking during that time, dies a sad death as winter intensifies and he has no food to bank on. Something uncannily similar is happening in the world today. But with one big difference. The ending may not be so similar after all. The ants are the Germans, Chinese and Japanese. The grasshoppers on the other hand are American, British, Greek, Irish and Spanish.

The ants have been producing enticing goods that grasshoppers want to buy. What the ants have been getting in return for selling their wares has been mostly been grasshopper debt. Promises that the grasshoppers will pay back in future their debts to the ants. But as the ants have realised, a consumption binge based on leverage can go on for a while. But not forever. The day of reckoning has now arrived. And the grasshoppers have nothing to pay the ants. So some of them print more money (Americans), and some try to convert to ants by slashing their fiscal deficits (Greeks). The former then end up paying back the ants with a currency of lower value. The latter leads to huge write offs as some grasshoppers die in the process. Either ways, the ants have turned out to be the losers. The new moral of the story? Do not lend to grasshoppers!

Credits:Equitymaster.com

Fooling the Gullible

10.5.10

Street smarts , they say , are best learned on the streets. What better place can there be than the tough streets of Mumbai? If you can survive the rough and tumble in this city, chances are you can do it anywhere on earth. The lessons learnt here can be useful in far flung areas of your life later. You must have the wisdom and the intelligence to draw an analogy and corelate.

One of the earliest con games I have seen has left a lasting impression and comes back again and again as a reference point in many of the sophisticated fast ones that are pulled on us from time to time. Be it book building, price rigging. circular trading or what have you.

Roughly 40% of this megapolis' population has no choice but to commute by local trains. Besides your workplace, much of your time and energy is spent in getting from one place to another. Most other activities, from buying vegetables or undies or sundries on the way back home to downing a beer are ancillary activities to this commuting.

Among the longest foot overbridges on this network is the one at Matunga. It starts on the Western Rly side and ends on the Central Rly side, and is a goodish km+ long.When the traffic is thin, this overbridge can give you the creeps. It has the typical " Nikaal, Ghadiyal nikaal, nahin to cheerke rakh doonga" ambience.

This foot overbridge is also home to enetrpreneurs hawking newspapers, flowers, lemonade, undies/hankies, lottery tickets etc. This is commonplace at most stations.

The more enterprising guys turn a trick called teen patti. It is a typical "get rich quick!" lure. To set shop, all that is needed is a pack of cards and a box of sorts toplace these cards. And most important, cronies who impersonate members of the general public.

This is how the trick goes: The bloke deals the cards and gets himself surrounded ( almost hidden ) by half a dozen of his cronies. This small crowd is the nucleus to garner the attention of the passersby. The bloke lets a couple of his cronies win, curses them for impoverishing him, discourages them from playing more and says others also should be given a chance. Couple of his cronies move away to create an impression of authenticity. Once the system is cranked, there is a steady stream of gullible fools who are ripped off subtly. They even have a trick to assess how much cash the bakra is carrying. One of the bloke's cronies will ask for change of a large denomination note ( if this note is a dud , then a double whammy ! ). Anyone from the crowd who volunteers change is targeted for a rip off. The usual trick is to let him earn a profit on small wager, induce him to raise the stakes and finally zilch!

......... To be continued

Fine print in Insurance Policies

2.5.10

We may be blissfully unaware of the following risks which are out of our control and could present a nasty surprise in case of a mishap.

The following occurrences/accidents are not covered under this policy (read the policy wording for an exhaustive list):

1. Suicide or accidents resulting from attempted suicide, regardless of mental or psychological state;
2. Accidents resulting from obvious intoxication or use of narcotics, medicine or harmful substances (unless administered on the advice of a physician);
3. Medical accidents except those occurring during the treatment of an injury sustained in an accident covered under the policy;
4. Accidents occurring in war or warlike operations, or civil disorders and uprisings, including revolution, rebellion, strikes, labor movements, civil commotion or fighting;
5. Accidents occurring during the commission or attempted commission of unlawful acts;
6. Accidents resulting from intentional actions of the insured presenting serious danger to himself/herself, except the rescue of people in danger;
7. Injury or Disease directly or indirectly caused by or contributed by ionizing radiation or contamination by radioactivity from any nuclear fuel or from any nuclear waste from burning nuclear fuel;
8. Injury or Disease directly or indirectly caused by or contributed by the radioactive, toxic, explosive or other dangerous properties of any explosive nuclear equipment or any part of that equipment;
9. Accidents occurring during the practice of a sport, or time or endurance competitions;
10. Loss sustained while flying in any aircraft or device for aerial navigation except while riding as a passenger (but not as a pilot, operator or member of the crew) in or on, boarding or alighting from a certified passenger aircraft provided by a commercial airline on any regular scheduled or chartered flight, and operated by a properly certified pilot flying between duly established and maintained airports;
11. Accidents occurring while serving in any branch of the Indian military or armed forces whether in peace or war;
12. Accidents resulting directly or indirectly, contributed or aggravated or prolonged by childbirth or from pregnancy;
13. Accidents sustained while participating in contests of speed using a motorized vehicle or bicycle;
14. Any opportunistic infection and/or malignant neoplasm, if at the time of the accident or sickness the Insured had an Acquired Immune Deficiency Syndrome (AIDS) or having an antibody positive blood test to HIV (Human Immune-deficiency Virus). Opportunistic infection shall include but will not be limited to pneumosystis carinii pneumonia, organism of Kaposi’s Sarcoma, central nervous system lymphoma, and/or other malignancies now known or which become known as causes of death in the presence of Acquired Immune Deficiency Syndrome;
15. Any Pre-existing condition;
16. Congenital anomalies and conditions arising out of or resulting therefrom;
17. Participating in skydiving/parachuting, hang gliding, bungee jumping, scuba diving, mountain climbing, pot-holing.