Feed the Fed

Alright, it’s been way too long since I brewed something… So... Let’s get to work.

The Context:

October Jobs Report.  It seems that companies have added about 271,000 jobs in October. This sudden surge in the number of jobs added has been the fastest rate change yet and as an effect has sent the unemployment rate to 5% which is the lowest level since April 2008.

Ok, what does that mean?

Well, according to Economics, inflation rises as unemployment goes down. I know sounds strange at first because we are used to associating negatives with negatives… but Economics thinks otherwise.. for every good, there is bad. Hence, as more and more people get employed, they have money to spend, and as their spending ability increases, so does the demand for things and hence price rise or inflation. Tada!

All right ok we understood that employment increases inflation, what’s next?

Coming to that; USA’s central bank rate has been practically 0% for almost a decade now... 8-8.5 years actually. So now they want to increase that. Now maybe you’re thinking, wait increase bank rate or as its popularly called Fed rate in USA, wouldn't it increase the cost of loans? That would make it harder for people to get their hands on more money, that’s bad, why does USA want to do that??

Weeeelllll…. Inflation in USA has also come to about 0% and now that there’s a sudden drop in unemployment, this inflation will go up and they don’t want that to happen. Simple right? Wrong! Nothing is ever simple!

 Think about it, if inflation goes from 0 to 0.5 or even 1% what’s the big deal? Growth and inflation are directly proportional, so if inflation rises (up to a certain extent, not like Zimbabwe) it means somewhere you are making growth. So the story of wanting to keep inflation under check is bogus.

Wow, ok boss, so what does all this mean then? Why do they really want to increase the fed rate?

I’ll tell you… because they want to look good.

For a stable economy, the Bank rate needs to be respectable, well at least not 0. Japan’s central bank rate has been at zero for almost 15 years, and everyone knows Japan is a saturated economy. They don’t want the same to happen to USA.

Alright… We get it now... so they want to give the Fed rate a hike because they want to look good and look like they made a recovery from the 2008-09 crash. But if this make believe stunt is what they want to do, then why didn’t they do this earlier?

Good question. Frankly, I believe they are doing this because of the presidential elections. However, this post is about a conspiracy theory. Now, where’s the theory??

The Theory

We know what the context is, how Recession, Recovery, Fed Rate, Inflation, Growth and Unemployment are related to each other. And we also know that unless Obama and his govt. show some proof of recovery, it will be really hard to get a third term for the Democrats. So, there’s but one option to show this for sure, increase the fed rate.

This might choke cash flow in the system but! And I mean a serious But! This fed cut is not to choke or pour money into the common man of USA, but it is to show the outsiders that USA is on track for recovery. We must note that people are really wry of the situation. Japan is in a recession, China is looking unstable, and India is still volatile. Everyone else is anyway insignificant. So investors will put their money into USA.

But sir, what about the employment? The govt. can’t simply cook it up, how did nearly 200 thousand new jobs come up within a month??

Ask yourself that question again! How did nearly 200 thousand jobs come up within a month?? Come on!!

I looked it up; the October jobs report a little and I found and I quote

“White-collar businesses added 78,000 profession jobs. Health care added 45,000 positions. Retailers took on 44,000 new workers, and restaurants hired 42,000 people.”

I’m not chasing after everyone, but I got curious at the restaurants and so did a little more digging. About three companies did 80% of this 42000. And surprisingly, these three are Pizza Hut, Taco Bell and KFC. All three belong to the same parent organization of Yum Brands, Inc.

Now about this Yum Brands, Inc.

Yum Brands stock tanked 11% in October. They said it’s because the company didn’t meet the analyst's expected quarterly revenue... seriously? 11% because it missed “analyst estimates”?? Ok I'll believe even that… But listen… The quarterly revenue actually grew by 2.2% and increased the "adjusted earnings" by 14%.

Now the stock, even after recovery is at 5% below last year’s price, but the earnings are high and they just hired 42000 people!!

Here’s where I come in... US wanted to hike the fed rate so bad... But they couldn’t just do it.. Neither could they leave it at 0 and be another Japan... sooo.. They called some of the big guys... like Yum and a few others… and said, look guys, you need to hire more people.

We just saw, that the sales revenue of Yum isn’t that great, the stocks tanked 11% but still its profits are awesome. How?? Think! Universities and Hospitals are known all too well for Govt. indulgence... Sooo… I’m just thinking… somehow someone made a big donation or an “adjustment” leading to a growth in numbers, then the hiring boom and hence creating a clean, unsuspecting and natual green signal for the fed rate hike.

But the question is … will you buy this natural green signal??? Is it all that natural in the first place? Will you invest in USA after knowing this??? Or is Obama really looking for investment in America and the American people or is it all just to get money for a short term till the elections are over??

Psalm E Pakistan

The climax of the movie border always leaves a warm fuzzy hangover. Though it’s about a war, the song at the end does make you feel that the war was a mistake and both of us have so much more to worry about than fighting over boundaries or anything for that matter. I was always interested in Pakistan, and writing about Pakistan. Any Indian or Pakistani of the Present day or at least the youth would have strong feelings about the whole partition of India episode. Some objective and some perspective, but all of us have views, bends, feelings and a stance. 

India was one of the founding members of the Non-Aligned Movement in the 50s and 60s while the USA and the USSR were busy making pacts and treaties to make their respective power blocs bigger and stronger. Now one might say the Non-Aligned Movement was started by poor or the then 3^rd world nations because they just couldn’t risk supporting one and be the target of the other’s fury. As it is, the Non-Aligned Movement is based on a bigger idea. Its about Believing that it is possible to remain neutral at any time by anyone. And being an advocate of being objective I support this theory and hence have always held an objective view over Pakistan. 

A few months ago, say 2 or 3 maybe I picked up Shashi Tharoor’s Pax Indica. It basically talks about India’s foreign policies, foreign relations and India’s place on a global setup. He spoke extensively about Pakistan and India. The chapter was rightly caller Brother Enemy. Pakistan is after all born out of India and the people are more or less Indian. They always have. 

Mr. Tharoor speaks of partition, Kashmir, the different wars we’ve had and finally talks emphatically about terrorism. His points are straight and precise, and so yet sensitively carved live the curves of Megan fox. (Sorry whenever someone says curve I think of her :D)

He talks at length about the gaps between the INTELLIGENCE and the civilian government of Pakistan. Its a known fact that the INTELLIGENCE is sitting on tones of cash. In fact the INTELLIGENCE gets almost or more than half the total budget of 1 fiscal year. So in a situation where there is a serious lack of schools, hospitals, or in general amenities of life the army and INTELLIGENCE suck all the money out of the people of Pakistan. The army isn’t too keen on listening to the will of the civilian govt. and caters to its own goals, which may not always be intended at the best of India, and in turn resulting in the bad of Pakistan it self.

I was torn in half when I read these. Of course I knew that the army or Pakistan and the civilian govt. don’t always see eye to eye, but the revelation of the fact that the govt has limited hold on the army did raise my brows, like my eye brows was one with my hair.

Another question boiled into me was who’s gonna tend to the people?  The politicians made a lot of noise and puffed up the people that theres a need to end Musharraf’s rein as president and there a need for proper democracy and what not. So the people did get excited and come out on streets and after a lot of crazy things (beyond my comprehension) there were elections and Muhammad Mian Soomro was elected president.  And after Benazir Bhutto’s murder, the PPP was elected to power and Asif Ali Zardari became the President. All this is fine but what are these people doing? 

Pakistani people are still struggling against the terrorists, there are criminals hiding in Pakistan thanks to the INTELLIGENCE’s invitation and reformers and socially responsible civilians are killed in broad day light.  And if you’ve been complaining about the raise of fuel prices in India, the fuel price is way over a hundred rupees in Pakistan, and its gets worse, price determination happens every week! 

So is the democracy drama and all the things these politicians did to overthrow Musharraf an eye wash? I asked my Pakistani Orkut friend of 3 years. 

Yes! 

The one answer with an exclamation mark was like a gun shot at point black.

He went on to say, 

Things were very good in Musharraf regime, call him a dictator or whatever you want to but he is the man who supported freedom of media. Even pak's economy was boosting. And now things are pathetic. You know, he was the one who set Pak before Islam. That’s what a country needs. 

It felt nice to listen to him. I probed more and asked,

Ok what do see for Pakistan in the Future?

I can not say anything here. If you see the history of pak, there have been some good times. But when they start building up they falter somewhere. so I can only hope that future is bright; which is only possible by imparting proper education. There is a dearth of rationality among masses and one simply CANNOT understand religion without education. Thats my opinion yours can differ obviously.

I definitely had no reason to differ there. I was also stunned at his strong emphasis on improving education. I liked that. I had never spoken much about national politics with this guy. It had always been about Harry Potter and cricket. Except one odd day when he’d told me he wanted to be a computer engineer. 

So I bit the bullet and finally threw a tough ball at him. 

Me:

cool... one big question thats really been eating me

your cool right?

He:

haha

yeah

Me:

yeah.. so

the question is

how does one remain patriotic and try not to be ashamed of his country and not choose to make rash decisions when there are so many figures pointing mistakes from outside and so little action been taken from those responsible?

He:

thats a tough one

and mature people here in pak do think about that

Me:

but good question right? ive been thinking a lot

He:

yeah good question!

but majority satisfies itself by conspiracy theories

it may sound weird to you

but majority here thinks that all these nations are anti Islam

anti pakistan

and that is the reason why all this blame game is being played

Me:

some ppl get high on substance.. some on religion

He:

true

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It was really something. It gives a lot for the Brain and Heart when there are people thinking and acting like this guy. The teenager Malala is a example. She’s another example of the youth wanting rights and education for their people. She was a strong, neutral voice talking of the truth and that offended many a bad man. Too bad the system just won’t let such people run the country. It also reminds me of a beautiful video featuring mid/high school girls from Pakistan talking about how they really feel and how they are made to feel about the Indo-Pak relations.

Rounding up this post, I’m not going make comments on the partition of India or the numerous wars or other difference India has had with Pakistan because this was never a political write, the post was aimed at talking about the people in Pakistan. (I don’t know if they call themselves aam janta :D) I wanted to say that we need empathize with the people of Pakistan. On the one side there is the adamant army and intelligence with its own agenda (no one knows what the army wants) and on the other side there is the helpless civilian govt and politicians fishing for power and money. In this quarrel... what’s to happen of the people of Pakistan? Does anyone care about the people anymore?

 

Democracy with an H

It’s not hypocrisy; it’s just democracy with an H. That pretty much summarizes how the politicians… No wait.. Why just politicians? That’s how all of us think. The last few days have been so shameful and disgusting for the democracy of India. What makes it worse is no one knows what is right and what wrong. It’s true that right or wrong are relative terms, but the events of 5^th june really negate every little bit of hope that the common man has in reason and justice. 

Looking back into India, corruption has always been a part of any society and it remains to date. People come to power only to make personal use of it. Defining democracy, it is a form of government where citizens elect their leaders to serve them. Over a period of time, the serve has been replaced by rule. So now, people in power are just rulers and not really leaders or people who come to serve us.

Speaking about the recent events, we all know who anna hazare is, he is an ex army soldier and now a popular social reformer. Ok I won’t bore you with his facts.. moving on.. anna hazare fasted to bring the jan lokpal bil into act and can be called to have been successful(hopefully) to a certain extent… but what his fast did was it raised a hope.. and there he was, world famous over night and had lots and lots of followers (including kids like me who decided to skip dinners and got yelled at by mom) now if this was it.. it would’ve been great.. but we’re all humans, and everyone wants a piece of action and so it was with popular leaders, diplomats, movie stars and that.. is where baba ramdev comes in.

Baba ram dev is supposed to be a samyasi who took to teaching yoga and pranayama and lived a (supposedly) peaceful life.. like all teachers and “good-doers” he wanted to spread his goodness and started with a few things like yoga research centers and stuff.. all this is cool.. but in September 2009, he bought an island for 2 million pounds!! How can someone do that? So he has this huge “aashram” in haridwar, has an island where he again has his “aashram”(which I think is actually just a spa) and flies in a private jet.. this has got to be the most coolest “sanyasi” in the history of sanyasies.

Ok so the deal about 5^th june.. now one cant really point out whos wrong and whos right.. it seems that a few reports and papers say that baba ramdev hired the ram lela maidan to conduct a yoga camp, now how can he call for a protest satyagraha?? If you ask the bjp.. I guess they would just say “its immoral but not illegal” anyway.. so that was the baba’s bad.. what about the government? From going to the airport to receive a “sanyasi” to sending cops in the middle of the night and breaking apart a crowd of more that 50k people, does anything make sense? everything makes the government look like a confused and desperate flock of crows.. and now we have the political tamasha of everyone digging history, making allegations and hurling stones and shoes at each other.. where am I? where are you? Or where is any citizen of India? long live democracy huh? 

From what we know, a sanyasi is supposed to be someone whos abandoned everything and lives only for god.. this doesn’t sound like ram dev baba now does it? Actually that’s how its been with all spiritual leaders, everyone has some part to play in politics or with big money. So if the learned, enlightened, holy men who’ve abandoned everything and have inner peace(sorry, saw kung fu panda yday) cant keep their hands off money and power, how do you expect the politicians to be clean? 

What I mean is, the government may not be perfect, democracy might not be working, and not all gurus may be leaders, but you are you... What I mean is… some people look for leaders and some for followers, you.. Just need a path. If your path is right... everythings right.