In 2008, we saw huge financial crisis taking the breath away from stock market, making hundreds and thousands of people jobless and many more on the brim of a likely lay off. The year 2009 doesn’t look any rosier.

I also come from a similar background and at present many of my colleagues (including me) face the threat for no fault of ours. The fact is the company has to survive and in doing what is right, it will try to retain the most appropriate talents for the right job at the least cost. Slam dunk, isn’t it?!

Here are some warning signals that you might come across

1. Your job description shrinks
2. Your projects are put on hold
3. You seem to find it difficult to get things done
4. You have a new boss or there is an organization restructuring
5. You are not invited to meetings
6. Some official mails didn’t make its way to your mailbox
7. Your company is not doing good, financially
8. Your company has been blacklisted by some regulators or face several lawsuits

Common knowledge will tell you to keep a low profile and don’t do things that are none of your business. But, is that the answer ?

I have tried to list down a few tips that might come handy.

Don’t panic, have patience

During tough times, quite often you will see that you are not being involved in many meetings nor in any crucial decision making process. Chances are that you are getting a warning signal from the management. My first advice is don’t panic. As long as you have not been told, you are in good books. If you panic, you will tend to do mistakes that you would not have wanted to do. Patience is a great virtue and these are the times that you would need the most.

Speak to your manager

If you think you might have been left out of the meeting, you have a right to know why you have been treated so. Chances are that, it was just a passing mistake. Speak to your manager and get it resolved. Always remember,  if there is a bad news that you are expecting, it is always better to hear it upfront rather than having to wait till the last moment.

Don’t keep a low profile

Whenever  there are tough times, there is usually a temptation to keep low. That is a grave mistake. If you keep yourself low, it might be difficult for you to get up and walk. Always be active and keep yourself ready for anything that comes your way. Be active in meetings, express your opinions but don’t go overboard.

Keep the communication open

During these tough times,  your boss is your best friend. Try to be in his good books, keep all lines of communication open and be open for suggestions.

Never play politics

This is the last thing you want to do in the office. If your seniors get an iota of clue that you are playing politics, then you will definitely be one of the firsts on your way out. This is not the time for dirty games or one upmanship.

Do the right thing

All of the above points to one simple adage called Doing The Right Thing. If you know what you are doing is right, as per you by all means go ahead. If there is an iota of doubt, take a second opinion. Remember -life is all about doing the right things at the right time at the right place.  If you are clear on this, then you half of your job is done.

Be on the look out

When you know that a storm is on the anvil, look for shelter.  If your company is not doing financially well to sustain itself, signals are ripe enough to take a look at a switch over to one who can afford you. Be on the lookout for a new job, a new opportunity. Mostly during tough times, it might be extremely difficult to get a job and it could take anywhere between three months to six months or may be a year of persuasion. Hence start the hunt as soon as you get your warning signal.

As Barack Obama rightly said

Change will not come if we wait for some other person or some other time. We are the ones we’ve been waiting for. We are the change that we seek.

Image Credit: Notions Capital

Popularity: 8%

On Sunday the Government released a statement saying, Public sector banks will shortly announce a package for borrowers for home loans in two categories — for loans of up to Rs 5 lakhs and Rs 5-20 lakhs  The housing sector has been in trouble in the last 6 months with very few takers for houses.

With this bailout package, the government is going to subsidize the banks providing housing finance.  I believe, instead of doing this, it should try to control the price set by the builders. 

Tell me in which Indian city will you get a flat for 5 to 10 lakhs?  It is not possible in Tier I and Tier II cities.  Or only those who have 15 to 20 lakhs cash in hand will benefit from this package.  If you take a look at the top cities in India, the real estate prices are ridiculous. In cities like Hyderabad, it is almost impossible to find a flat which is less than 30 lakhs.  If you want a flat in the city or near the city it will not cost you less than 50 lakhs.

No government employee will ever earn more than 50,000 rupees a month and 90 % of private sector employees earn less than 25,000 rupees a month.  These people would never be able to buy their dream houses if flats are available only at such astronomical prices.

Have you ever tried to calculate the cost of construction?  I know a couple of builders and I got these figures from them.  For a super deluxe flat, for a square foot, cost of construction (including the land price) will be between Rs 800 to Rs 1400.  This might vary a bit depending on the land cost.  So if an sft is costing Rs 1400, have you ever seen builders selling it for 1600 or 1800?  They will never sell it below Rs 2500. They almost make 100 % profit.

Also remember that the prices of steel and cement have come down but flat prices wouldn’t come down in the last 6 months.

If government really cares for middle class people, they should set a cap on the profits made by realtors.  Like cement and sugar, regulate the prices of houses.  Ask the builder to provide the cost of construction and allow him to make a maximum of 30% on construction cost.

Providing cheap loans to people for buying houses is a failed American policy. 

The government is encouraging realtors to keep their high margins and using the tax money to subsidize loans.  I urge the Government to increase the affordability of houses.  In all the metros there should be at least 30 to 40 % reduction in the prices of houses and apartments.

Right now the sentiment is low and reality sector is under correction.  Please allow the correction so that it can regain its health. A correction in these overhyped cities will eventually bring down the prices.  Don’t coerce it to gain artificial health by spending tons of people’s money.  If people don’t buy flats for another 6 months, and we can see the prices drop by 30 to 40%.

In the last few years, people panicked and purchased houses, as they thought the property prices might further increase.  But what people forgot or didn’t notice is that in any economy nothing can keep increasing for ever.  It took a big crisis (subprime) in a big economy (America) to prove it.  Not just the people but even banks missed this simple truth and got into trouble.

We the people of India should understand how the economy works and make wise decisions while a buying house. 

So whom is this policy going to benefit?  Definitely not the people in Metros and Tier I cities. It will benefit Tier II and Tier III cities.  Our infrastructure is not able to handle the current growth. Cities like Mumbai, Bangalore and Hyderabad have become costly. This will force builders, IT, manufacturing, and other investors to invest in tier II & III cities.  People in these cities will start investing in Houses. 

This is the only solution to offer a competitive price to the world for our product and services.

I hope one day we will have a world class infrastructure like US or Europe.

Image Credit: Kevindooley

Popularity: 17%

Where the mind is without fear and the head held high;
Where knowledge is free;
Where the world has not been broken up into fragments by narrow domestic walls;
Where words come out from the depth of truth;
Where tireless striving stretches its arms towards perfection;
Where the clear stream of reason has not lost its way into the dreary desert sand of dead habit;
Where the mind is led forward by Thee into ever-widening thought and action;
Into that heaven of freedom, my Father, let my country awake

                                                                                                by Rabindranath Tagore

Life will be a peaceful journey if we are able to face difficulties without fear, swallow the bitterness of tragedy, enjoy the happiness, and love that life showers on us.  Such lovely life is being crushed to death by the ruthless terrorism in a fraction of second right in front of our eyes.  In the journey of life death is appearing everywhere in today’s world. 

Parliament, temples, malls, shops, local trains, on streets, in star hotels, in air, on land or in water – everywhere terrorists are hunting down innocent people.

Recent attacks in Mumbai with are a direct war waged by terrorists on India.  Every time something like this happens I see a regular drama and it always has the below statements:

“We will destroy the very roots of terrorism and make our country a safe place again”

“I appreciate the people for the courage they have shown in this hour of crisis”

“We will not bow down before terrorism”

I think by now you would have guessed the people who make these statements.  These are our Netas.  When terrorist beasts are killing people mercilessly, what is the assurance being given these leaders,:

 “Incidents like these are happening all over the world and it is difficult to predict these incidents”

 “In a big city like Mumbai it is not possible to keep an eye on every person who comes in”

This is nothing but escapism and gross irresponsibility of the leaders.  They don’t even feel ashamed for making such statements. First time when terrorists killed people, I hated terrorists.

But then they repeatedly killed people, I started hating our politicians and law makers more than I hated terrorists for giving them a license to kill. 

10 to 12 terrorists who have entered Mumbai via sea  were able to hold the entire nation as hostage for 3 days. This clearly shows how incompetent our leaders, our policies, and our intelligence are. 

As if a sudden realization has dawned, Shivraj Patil resigned form his post. 

But it took a nation to loose 200 lives of civilians, 24 police officers, and soldiers to remind the Home minister of his “Moral Responsibility”.  After the UPA government came to power the number of attacks by terrorists have increased manifold and nothing was done politically to tackle this issue.  With all their concern for the terrorism they got POTA abolished. 

These leaders who can’t even step out without a dozen commandos around them say “people here are very courageous”.  They don’t have to certify our courage.  People of this nation are always more courageous than the leaders.  Though we know that our lives are not safe every time we step out, we still walk on the street without any fear.

Leaders make statements like “we will not be cowed down by terrorism’.  But it’s we the people who show this in action.  Within 3 days of the terror attack, ‘Leopold café’ is opened and people thronged it.  This is testimony to the courage of an Indian.

Mumbai resembled a war zone for 3 days.  Once it’s over people are back on the street not because of the assurances given by our politicians but because of the courage and patriotism shown by the Armed forces. 

Those brave commandoes who have sacrificed themselves to save us gave us the courage to come out and salute them.  Those of us who witnessed their dedication and sacrifice in flushing out the terrorists from Taj, Nariman house and Oberoi can’t forget them in our life time.

Even today we don’t have proper mechanism in place to tackle something like this.  We don’t have the weapons or technology or strategy.  How can you explain bullets piercing the bullet proof jackets of our cops? Our government is not able to stop the inflow of RDX into the country from Pakistan and Afghanistan. 

Our intelligence officers became spectators when the terrorists were equipping themselves with latest weapons.

After the parliament attack in 2001, though the government declared Terrorism as a national issue, nothing was done to beef up internal security.  Though, Prime Minister spoke about setting up of a ‘Federal Investigation Agency’ nothing has materialized.  Look at America, immediately after 9/11 attacks, they have put in place ‘Department of Homeland Security’.

At last Prime Minister woke up and setup a task force to come out with a strategy to counter terrorism in 100 days.  Actually, this should have happened long back.  None of the states in India has plan in place for terrorist attacks.  There is no proper co-ordination between our Police and intelligence.  Attack on Mumbai is an attack on the whole nation. 

Hope at least now our leaders will open their eyes and really take an action to fight terrorism.

Image Credit- Sameer Gupta

Popularity: 20%

Whole world is reeling under economic crisis. Growth rate of countries is slowing down. While some sectors have lost heavily, other sectors have revised their targets. Amidst all this turmoil, there is one industry that is making profits and guess what this could be?

It’s the epicenter of the financial tsunami-It’s the banking industry… The very cause of the turmoil in the world is now making money in India.

Is it the strict regulation of RBI or the traditional way of running the business that has helped the banks to be in profit ? Or is it the foresight of Indian banking system that has ensured that domestic banks are not heavily exposed to the credit derivatives like US banks ? The fact is that the Indian banks have not incurred huge losses unlike their counterparts in the US and rest of the world.

Banks which faced pressure on their margins till a couple of months back are now on their way to making money. With the RBI’s initiative to increase liquidity in the system, banks got huge amounts at their disposal for lending. Even the money that was lying with RBI and yielded very little profit is now available for banks for lending at higher rates. Banks are lending at higher than PLR to corporates due to the changes in circumstances and all these are helping banks to boost their bottom line.

Quite a few factors have contributed to the profit margin of banks:

1. Reserve Bank of India has cut CRR by 3.5 % and brought it down to 5.5%
2. It has cut the repo rate by 1.5 % and got it to 7.5%
3. RBI cut the SLR by 1% and got it to 24%.
4. Banks used to lend to companies at below BPLR but now they are lending at higher than BPLR as the risk profile has increased due to the hit on the margins of the companies.
5. Banks used to shell higher deposit rates. But with the markets falling, people are finding deposits as a safe place to park their money and banks have cut down the deposit rate.

All these have increased the profit margin of the banks by 3%.

While all sectors of the economy are facing the heat of economic meltdown, it is surprising to see that our domestic banks are really making money.

Banking in India has been indeed a blessing in disguise. What do you think ?

Popularity: 16%

I often wonder when I read about the bailout packages dished out by Governments all around the world to aid banks and other financial institutions that are on the verge of bankruptcy especially the amount of money spent in bailouts in last couple of months is staggering. I am even surprised that there was not a single protest from anywhere and these financial criminals go unpunished. It is the common man who is going to bear the burden of additional tax and increased debt.

Why should tax payer’s money be used for bailing out greedy banks and corporations that have done business only with profit as motive and no concern for morals or ethics and absolutely no concern for the consequences for their acts. Putting public money in corporate coffers is just not acceptable. Financial crisis that has happened is a man made crisis done through substandard policies, deregulation and greed. I can understand putting in public money for natural disasters like earthquakes or folds. Governments all over the world have spent trillions of dollars on bailouts already

This kind of bailout is ABSURD!

We must collectively protest this .This is real money, my money, your money, our money which is hard earned paid in the form of tax.

Why should banks and financial institutions which never cared about the creditworthiness of people who lined up for loans or the soundness of derivatives business be rewarded. We should not allow government to write checks on tax payers’ account. This measure will increase the budget deficit by a significant amount, with no guarantee of recovering the amount and not holding anyone accountable for the misdeeds they have done.

What is the signal you are sending to the corporate world and investors through these bail outs? Do your businesses as you like and we will reward you for the blind errors you might commit. Is this the right way?

As far as I am concerned, there should be a thorough probe into the events that have led to this disaster and every CEO, Executive or Government who were part of this financial carnage should be jailed, their assets sold and put in a bailout fund.

It is time to wake up and realize that greed is the basis for all the financial disasters and find a way, may be strict disclosure norms, increasing the transparency in strategic decision making, making one responsible for his actions and

Few weeks back Finance Ministers of several Asian, Europe and Americas countries met and decided to act rapidly on the financial crisis

And now stock markets are being artificially manipulated by bailouts by governments.

When corporations see that the demand is coming down , it is natural for the stock to take a beating. But every other day we see CRR, SLR rate cuts which means our money is loaned back to us and the market stages a rally of any significance. FIIs and Badla traders slowly and routinely remove their money from our markets to invest elsewhere leaving the retail investor in a fix.

It is certainly not a good thing for a responsible, saving, taxpaying citizen, with no defaulted loans or credit card debt to compensate for the that Wall Street gamblers will go bust on their stupid and greedy bets, over-leveraged and poorly managed businesses with huge losses.

Let me tell you some interesting fact. Lehman has set aside $2.5 billion as bonus for their employees even as they went bankrupt for the great performance they showed in pushing the bank to bankruptcy.

What do you call this?

Popularity: 24%

Hope is what drives man. If there is no hope there is no life.  But when it comes to stock market it is the greed that drives investors. Though this doesn’t apply to all investors majority of them expect to earn 100 rupees by investing 10 rupees in a short period.  Stock market has become a synonym for greed and off late has become a new bungee rope.

Even if you are cautious while investing, in an integrated world, events in one part of the word  will influence the whole world.  Few clever people turned their shares into cash as soon as the meltdown started and others are now hanging on to some worthy and some useless electronic share certificates.

This decline is not limited to stock market alone but has spread everywhere.  Be it real estate, increasing prices, inflation, liquidity crisis, decreasing jobs…  There is darkness everywhere.

Common man might be thinking that terms like economic slowdown or credit crisis will not affect him. Losses in stock market will not only affect the investors. It will affect the whole economy. If markets are down, capital raising will slow down which in turn effects production of goods and services and standard of living will stay where it is. For example:  Metro Rail project in Hyderabad is not able to raise funds in the market. Economists are predicting a depression similar to that of 1929 ‘Great America Depression’.

But the difference is, in those days economies weren’t integrated and countries weren’t dependent on each other.  But today we can’t look at any countries economy in isolation.  Nokia based in Finland sells more than 50% of it’s mobiles in India and China.  If there is a slowdown in India and China and Nokia exports decline, it will have a major impact on Finland.  Infact , in the current crisis it’s the export oriented nations that are hurt most.  In a way India is protected as most of the goods and services produced are for self consumption.  It’s only the software market which exports services to other countries that has suffered most in terms of loss of business profits and jobs.

One thing that Government, regulators should keep in mind is that we are rapidly opening our economy to outsides increasing the risk of external events affecting us. In 2002, Inida received foreign investment to the tune of 1200 crore dollars while it has gone up to 11,000 crore dollars in 2007. With so much investment coming in, share markets went up and up, real estate boomed. After that we know what happened. 

America sneezed and the rest of the world caught cold.

When markets fall FII’s are the first ones to withdraw money. In the last 2 days alone Europe based funds have sold more than 12,000 crores worth of securities due to the redemption pressures they are facing. How can you explain a decline in SBI stock price when it has announced an increase of 40% in its profits?  FIIs are selling in crores and taking back their investments.  That’s the reason for weakening rupee.  It has almost touched Rs 50 and I will not be surprised if it touches 54-55 in another 6 months.

What should be done?

Government should have foresight.  Our Prime Minister, Finance Minister, Central Bank officials are all economic experts. They should decide on how much foreign investment should be allowed and what should be the level of disclosure or transparency for the money that is coming from outside?

If they had done this earlier today Indian stock markets would not have fallen so much.  Again, I am not against foreign money coming in.  All what I am saying is that there should be a mechanism to avoid hot money that just flows out at the outset of a crisis deepening the crisis further.  I agree that growth rate will slowdown bit but  slow progress is better than a rapid progress and equally or even faster decline.

There should be growth in any economy.  But it should be gradual and not at lightning pace. If the market hasn’t grown so rapidly, common man would not have put his money in it in haste and would have avoided the current blow.

 Government should focus mainly on

1. Inducing some confidence in the system, reducing inflation and strengthing rupee.

2. Strengthing the banking system further so that it will not collapse like the other foreign banks.

3. Growth rate has slipped to 6.5 % from 8.5%. Demand is already reducing. Since private consumption won’t be much, government should spend heavily on infrastructure projects which will propel demand.

4. Should reduce government expenditure wherever possible.

While the pundits have opined that US economic slowdown will continue for another 2 months, it will be a real test for Indian regulators and Government to keep the economy on growth track.

On this occasion of holy Diwali I pray the almighty to lead us from darkness to light

Popularity: 13%

Image Credit-US Treasury

A couple of weeks back, Hank Paulson, the US Secretary announced to the world his famous rescue package and demanded the approval of the Senate in US. A week later, the Senate voted for the biggest rescue package ever – A cool $ 700 Billion for reviving the fate of America.

Two people fought hard for the bail out – Hank Paulson and Ben Bernanke besides many others who supported the cause. Immediately after Senate passed the bill, Hank & his partner Ben swung into action and released the name of the person who would lead the effort of rescuing the financial institutions.

It was none other than Neel Kashkari – also nicknamed as “Kash & Karry” . Neel Kashkari has ben appointed as the Head of “Office of Financial Bailout”. As per Washington Post, Kashkari has been a close adviser to Treasury Secretary Henry M. Paulson Jr. on the credit crisis and helped draft the legislation for the massive rescue plan. He is expected to run the program on an interim basis until the Treasury finds a permanent head.

Neel Kashkari is a former vice president at Goldman Sachs, where he led the firm’s security investment banking practice. Neel graduated from Western Reserve Academy, a private college prep boarding and day school in 1991.

As per the US Treasury website

Neel Kashkari is Senior Advisor to U.S. Treasury Secretary Henry M. Paulson, Jr. He provides counsel to the Secretary on key policy matters.

Prior to joining the Treasury Department, Mr. Kashkari was a Vice President at Goldman, Sachs & Co. in San Francisco, where he led Goldman’s IT Security Investment Banking practice, advising public and private companies on mergers and acquisitions and financial transactions. Prior to his career in finance, Mr. Kashkari was a R&D Principal Investigator at TRW in Redondo Beach, California where he developed technology for NASA space science missions such as the James Webb Space Telescope.

Originally from Stow, Ohio, Mr. Kashkari graduated from the University of Illinois at Urbana-Champaign with a Bachelor’s and Master’s degree in Engineering. He also received an M.B.A. in Finance from the Wharton School. Mr. Kashkari and his wife Minal maintain residences in Maryland and California.

If you have not seen him talk earlier, you can have a glimpse of him speaking in the video . Here he makes a presentation on a proposed “Covered Bond”. This video was covered by C-Span

We sure have someone whom we can look forward to probably restoring sanity in the market by quickly implementing the $700 Billion rescue plan.

All the very best, Neel !

By the way, does he look like Andre Agassi ?

Popularity: 8%