Archive for the 'Economics' category

But, where are the shelves?

Karthik / September 22nd, 2005 / Books, Economics, Random / 2 comments

Books stacked on shelves, ordered using a system whose name is a misspelt synonym of condensation. Sometimes the shelves move, scaring you to death if you are caught between two of them. There are rows of computers running MS-DOS that try to hold people off from approaching the head honcho (or one of her assistants) that knows where all the books are. Trying to find a quote from a book takes a couple of days in a brick and mortar library, but it is free. Most everyone is happy with the arrangement - authors, publishers, librarians. Except readers interested in a little research.

Online behemoth borrows books from a few libraries, and scans them in digitally. Finding a quote from a book takes a few milliseconds.

Publishers hate it. And today writers have decided they hate it too. Go figure.

A Tail Well Told

Karthik / August 16th, 2005 / Books, Economics / 5 comments

Chris Anderson, editor of the Wired wrote an article called The Long Tail last year, where he argued that the future of entertainment lies not in megahits, but in the steady trickle of money from “niche markets at the shallow end of the bitstream.”

The article was received well - so well in fact that Anderson is now turning it into a book, following the lead of James Surowiecki whose book born out of a New Yorker article - Wisdom of the Crowds - was an instant bestseller.

Anderson maintains a blog on The Long Tail, a “public diary on the way to a book.” A blog is a great way to gather information for a book like this - a look at some of the comments on the Long Tail is enough to convince one of this.

And if the book is not a bestseller, I’m sure Anderson won’t be too worried. After all, he invented The Long Tail.

Dumbness ain’t a defense anymore

Karthik / March 24th, 2005 / Economics, Politics / No comments

Bernie Ebbers tried the “I didn’t know it defense and failed, but that’s not stopping Ken Lay from trying it again. And he just got some support from a book called A Conspiracy of Fools by Kurt Eichenwald, that seems to support Lay’s contention that it all happened behind his back.

This would be ironic if it weren’t sad: The Economist says Lay is on a “charm offensive” telling anyone who’d listen that he is in fact pretty dumb, and that he was not paying much attention to his company. The Times’s review of Eichenwald’s book explains why that is hard to believe.

Kenneth Lay, the company’s longtime chief executive, who hired Mr. Skilling and mostly turned over the management reins, emerges in Mr. Eichenwald’s telling as a kind of amiable simpleton, glad-handing his way through Houston’s moneyed upper crust. But unlike, say, Bernard Ebbers, the recently convicted former bouncer and high school coach who ran WorldCom onto the rocks, Mr. Lay is a Ph.D. economist and a former deputy under secretary of the interior, who had transformed the natural gas industry. Does Mr. Eichenwald believe that he really had no clue? That he never noticed the mad scramble to manufacture profits at the end of each reporting period? That he never wondered about the plausibility of a tenfold jump in revenues in just five years?

In case you’ve forgotten what Lay presided over: (from the Times’s review again)

In early 2000 Fortune magazine selected Enron as America’s best-managed and most innovative company, and Enron’s stock market valuation peaked at $73 billion that August. The following March the company announced that 2000 revenues had more than doubled, to $100 billion. The company paid its normal quarterly dividend in October 2001, announcing that regular earnings were up 26 percent and that it was “on track” to meet its full-year profit targets.

Six weeks later, Enron filed for bankruptcy.

Drive Through McMadness

Karthik / March 16th, 2005 / Economics, Random / 1 comment

McDonald’s is looking into outsourcing it’s drive through operations to professionally run call-centers.

“If you’re in L.A…. and you hear a person with a North Dakota accent taking your order, you’ll know what we’re up to,” McDonald’s Chief Executive Jim Skinner told analysts at the Bear Stearns Retail, Restaurants & Apparel Conference in New York.

I am sure a North Indian accent isn’t that far behind. At least the girls from Bangalore won’t proffer disbelieving “Huhs”, when I ask for a Big Mac with everything but the meat.

Ken Lay has (desi) company

Karthik / March 7th, 2005 / Economics, Politics / 2 comments

Straight shooter? anything butSeattle Times has this horror story about Naveen Jain, founder and fomer CEO of Infospace, which used to be the next-Microsoft a few years ago. Smooth talking, scheming, lying Jain used pretty much every trick in the book of creative accounting and then some more to keep Infospace stock up long enough for him to cash out.

It is a familiar story - just replace Enron/Tyco with Infospace, and Dennis Kozlowski with Naveen Jain and you get the picture. High profile CEO hyping his company’s (non-existent) prospects to the sky, usual suspect Henry Blodget hoodwinking unsuspecting investors into buying the stock, everyone that knew selling their stock before it tanks, and finally the average Joe that bought into the company left wondering where his $50000 dollar investment went.

I hope Jain goes to jail and stays there for a long time.

Somewhat jarringly, the article has this gratuitous reference to India. “Naveen Jain grew up in a culture mired in bribery and corruption, yet in a religion that deplores dishonesty.” What does that have to do with this story? I haven’t seen stories about Polish culture in stories about Martha.

Anyways, here’s a sample exhibit from the hall of shame:

Jain's $13 million home

… The Jains preferred something different and latched onto a 1.3-acre Medina estate called Diamanti — Greek for diamond — buying it for $13 million. The mansion boasted 16,500 square feet of space and a two-story garage. The garage shared a glass wall with the house so the owner could display an auto collection.

The house had a professional recording studio, steam room, sauna, exercise room, elevator and a two-bedroom wing for a housekeeper. The pool was covered with a two-story glass atrium so the Jains could swim year-round.

Link through Sepia Mutiny.

Razr starting to shave off Nokia’s Market share

Karthik / March 7th, 2005 / Economics, Random, Science / No comments

Finally, Motorola is starting to generate some positive buzz. The Razr is like the coolest cellphone ever - the iPod of cellphones.

For example, Motorola execs talk of a forthcoming music phone within the Razr family, Rockr, that might recognize songs being played in a club, let users download them to their phones and then send them home to their cable boxes and stereos. That would definitely be cool, and for Motorola, that’s the goal.

Elephants and tigers (with red stripes)

Karthik / March 4th, 2005 / Economics, Politics / No comments

Once again, an insightful series of articles from the Economist - this time about India and China, their politics and their economies. What’s good and what’s bad, and who can learn what from each other.

That India is an open society and China is not is one of the most glaring differences between the two. Some people in both countries are tempted to use it to explain another: that China’s economy has grown much faster. This survey will argue that this view is simplistic and misleading.

Some of the main reasons for China’s better performance have nothing to do with the political system. When China started its reforms, in 1978, it was poorer than India. Part of the gap now is due simply to that earlier start. But also, unreformed China seems to have done a more impressive job than India did in educating and providing health care for its poor. Reforms benefited from what economists call “good human capital”, and from a bulge in the working-age population that India itself is now experiencing.

India is often portrayed as an elephant: big, lumbering and slow off the mark. Now investment-bank reports are beginning to talk of it as a new Asian “tiger”. If that is what it wants to be, it makes sense for it to study China: the tiger in front is Chinese.

Update: Prashant Kothari blogs about a similar survey, from Standard and Poors. I am glad both these surveys try to address the myth that India is behind because it is a democracy.