I like Mrunal Patel's style of explanation - simple and no strings attached.So,in the following paragraphs I will present from his writings,with minimum handiwork by me.
If you have jargon-fright ,then this is just tailored for you.
He has intentionally skipped technical details.
Difference between Eurozone crisis and Subprime Crisis?
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First you need to understand Mortgage, derivatives and Asset bubble.
Mortage :
You give me $10,000 loan and I sign on a paper that if I can't pay back the amount before 2045, you can take away my house. So my house is 'mortgaged' to you.
Subprime dude :
He is the borrower who is less likely to repay a loan,because his income is low or irregular.
Why would bank want to give loans to sub-prime dudes in the first place?
Bank can demand more interest rates from such people because of their bad credit history. Subprime lending can also mean the car-loans, credit cards etc that banks sell. Besides when the general manager gives 'impossible targets' to his probationary officer,what can a man do? Just give out loans to every swinging dude around.
Derivative:
You’re a big bank, you've given such loans or credit cards to lot of sub-prime dudes and you know well that they're less likely to pay you back. So after a while, you decide to cash in your investment before these dudes start defaulting, so you repack those mortgage papers and make a new paper - 'security paper' -which basically says “to anyone who gives me $50,000, I’ll give mortgage papers of 5 houses”,this is derivative product, because this security paper derives its value from those mortgage papers.
Asset bubble :
So now you sold such a derivate product to a second guy, he then re-packs it with other things and makes a new derivative product sells it to a third guy...thus the chain continues. Here, no new asset (property or something that can generate money) is created, basically all of you are playing games with the same five houses mortgaged, blowing the balloon with even newer derivates. Thus the asset bubble is created.
A point comes when people who took loans or did big shopping with credit cards refuse to pay back and say 'take our houses, we don't have the money'.
Now with so many people refusing to pay ,there are too many houses to sell.
Remember supply and demand determine market prices?So house prices hit a low.
Now you can't sell the house, real-estate has collapsed, no one is ready to pay even $5000 for that house, on which you had given $10000 as loan. Your asset bubble is burst, and what you've in your hand: that piece of trash paper is a 'toxic asset' or a 'non-performing asset' (NPA). This is sub-prime crisis. And technically it was contained, after American treasury bought all such NPAs worth $1 trillion (somewhere in 2009), but the aftershocks are still felt.American economy is not back on track yet, because that $1 trillion bailout money didnot fall from sky, nor do the dollars spend on military expenditure in Iraq or Afghanistan fall from sky.
Eurozone Crisis :
Also known as Sovereign debt crisis.In the Eurozone, Governments of PIGS (Portugal, Ireland, Greece, Spain) were spending way too much money on subsidies,handouts to the economically struggling (like our Indian NREGA stuff )and bank bailouts etc. They used to finance their spending by borrowing from the market.
These nations earn most of their money from export to America and tourism income from American travelers. But the sub-prime crisis and the recession in 2008-09 meant Americans lost income,jobs,houses and naturally many stopped going on vacations or buying imported items. So the airlines,tourism and export business declined, while the expenditure remained the same. Hence in a way, Eurozone crisis is an aftershock of the Sub-prime earthquake.
Little concepts:
debt to GDP (ratio) :
Suppose Debt to GDP is 96% this means if the country produced goods and services worth $100 in a year, they already had outstanding loan-repayment worth $96.
High Debt to GDP means investors lose confidence in your country.These PIGS had high Debt to GDP than other nations, hence they are in the crisis.
But why only PIGS: why they ran out of money? (along with Debt to GDP %)
Portugal:93%
Over-spending by Government, inefficient Public Sector Units with too much manpower (just like our Air-India).
Ireland:96%
Their banks were running the same asset bubble game like the Americans. When it collapsed, Government had to bail'em out.
Greece:143%
Overspending on Social schemes, overinflated staff in Public Sector Units. Misreported its official economic statistics, to fool the investors in buying the Government bonds. Later Caught.
Spain:60%
Socialist Government, so lot subsidy and social-security and assistance to its poor and unemployed (like our NREGA stuff).
Italy too may join the club with 116 %
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Wednesday, September 28, 2011
Wednesday, September 21, 2011
Who choose to beg
I am intrigued by man's attraction to live by panhandling.
Why do able bodied people,who can live by labor,choose to live by begging?
Why is it so difficult to rehabilitate those who have lived long by begging?
"Like prostitution, begging is one of the two oldest professions on earth.Although varying by geography and the times, begging is universal. We have heard,even the richest countries like America and England have beggars in one form or another",a beggar in Kolkata sharply retorted back.
Where is their sense of self respect?Why is that not as universal?
The Indian government department responsible for elimination of panhandling,say that even after a prostitute or a beggar is sheltered and offered protection,in some form or another,she resumes her old habits.She cannot depart from her former way of life.
The social workers too have a similar opinion.Hence there is an immense amount of apathy on this issue.
Why is it so difficult to settle vagabonds?Why do slum dwellers,relocated to government housing,return to slums,eating,defecating,sleeping,raising children in the same area?Why don't the little tramps stay in school?
Reasons why people take to begging are numerous,often complex.
For instance,in India,poverty is real.But simple economics frequently falls short to explain begging. Very often,it is done in organized gangs,also,beggars here are very territorial.Breach of territory can lead to violent skirmishes.
Beggars have equality of sexes in their community.The woman can cohabit with any man and change whenever she so wishes.The children are independent and learn different trades like pick-pocketing,petty crimes,assisting professional thieves,acting as informants,peddling stolen goods etc,before they graduate to begging.
For some,begging is a family profession.For others, period of begging varies widely,from five minutes to a lifetime.
Sometimes needs can be very specific.Two little boys were begging for cigarettes on the Puri Beach once.When they were offered some money,they refused and ran away.
But many times the elderly, the disabled, and the destitute take to begging.
Beggars in India,have some degree of understanding of the human psyche.
When you step out of a famous restaurant,satiated,they realize you cannot refuse a hungry man.When you are walking in a park with your new girlfriend,they know you will yield,when pestered a couple of times.They crowd outside temples,because they are aware most people will give them money to score divine-brownie points.They can read faces well enough to target the right person who is sure to be moved by a story of a dying husband.The husband of course,could be in the next street begging in the name of his dying children and similarly the children could be in the third street with stories of dead parents.The transvestite gang-members can see that you will handover a 10 rupee note to avoid nuisance,especially in those long-distance trains.
But government organizations,reform houses,religious shelters,social workers,psychiatrists,psychologists and the whole of intelligentsia have failed to decipher the panhandler's psychology ,enough to be able to defeat it.
In Denmark,a prosperous country,I have seen beggars in the main streets and the city-center of Copenhagen.Their style of operation is very different from India.They approach you,stand very close,stroke your back and ask you to lend a coin as if they have known you for years!
A Danish colleague told me,all of them receive handouts from the government,but by the middle of every month - that cash is exhausted on drinks.Although this is an over generalization,her assertion reflects a common belief.Project UDENFOR researching on this phenomena in Denmark,attributes begging to foreign homeless migrants,many from Romania.They hasten to add that people who beg are from a mixed group.
A cross-country comparative analysis reveals Danish beggars are passive in their procedure while Russian beggars are more aggressive.
Though Begging is prohibited in Russia,it is not illegal hence it remains a grey area,coupled with Russia's corrupt administration,trafficking and begging remains a menace there.
In U.S.A,I have lived in a posh Boston suburb.Homeless people who beg there are very casual in their method of appeal.They live in shelters where they are fed,clothed,and all their basic amenities are met.But just like the Govt officials in India had said ,they find it hard to get over their old habits.
In the U.K,where I currently live,begging is illegal.The Vagrancy Act of 1824 makes it an offence to sleep on the streets or to beg.Although illegal,there is no associated jail sentence.
This Act was originally introduced in England and Wales but later extended to Scotland and Ireland.
Until recently it was believed that the Vagrancy Act 1824 had largely withered away through lack of use.But the sharp rise in the number of beggars in British cities and antisocial behavior of some aggressive beggars led to begging being made a recordable offence in December 2003, as part of the Government's initiative to handle crime.
Contrary to the public perception that beggars use the money for drugs or alcohol,researchers in the UK tell us ,begging here is driven by need.Charity organizations,civil groups and lib-dems had criticized the Government's move in 2003 as 'ineffective'.But the law remains today, at least on papers,and unsurprisingly,it has changed nothing.
Is there a universal solution to this phenomena of living by begging?Or perhaps it should be tackled on a case-by-case basis.Alas,I have only questions.The matter which I can unquestionably point out is the universal lack of political will to touch this job.
Why do able bodied people,who can live by labor,choose to live by begging?
Why is it so difficult to rehabilitate those who have lived long by begging?
"Like prostitution, begging is one of the two oldest professions on earth.Although varying by geography and the times, begging is universal. We have heard,even the richest countries like America and England have beggars in one form or another",a beggar in Kolkata sharply retorted back.
Where is their sense of self respect?Why is that not as universal?
The Indian government department responsible for elimination of panhandling,say that even after a prostitute or a beggar is sheltered and offered protection,in some form or another,she resumes her old habits.She cannot depart from her former way of life.
The social workers too have a similar opinion.Hence there is an immense amount of apathy on this issue.
Why is it so difficult to settle vagabonds?Why do slum dwellers,relocated to government housing,return to slums,eating,defecating,sleeping,raising children in the same area?Why don't the little tramps stay in school?
Reasons why people take to begging are numerous,often complex.
For instance,in India,poverty is real.But simple economics frequently falls short to explain begging. Very often,it is done in organized gangs,also,beggars here are very territorial.Breach of territory can lead to violent skirmishes.
Beggars have equality of sexes in their community.The woman can cohabit with any man and change whenever she so wishes.The children are independent and learn different trades like pick-pocketing,petty crimes,assisting professional thieves,acting as informants,peddling stolen goods etc,before they graduate to begging.
For some,begging is a family profession.For others, period of begging varies widely,from five minutes to a lifetime.
Sometimes needs can be very specific.Two little boys were begging for cigarettes on the Puri Beach once.When they were offered some money,they refused and ran away.
But many times the elderly, the disabled, and the destitute take to begging.
Beggars in India,have some degree of understanding of the human psyche.
When you step out of a famous restaurant,satiated,they realize you cannot refuse a hungry man.When you are walking in a park with your new girlfriend,they know you will yield,when pestered a couple of times.They crowd outside temples,because they are aware most people will give them money to score divine-brownie points.They can read faces well enough to target the right person who is sure to be moved by a story of a dying husband.The husband of course,could be in the next street begging in the name of his dying children and similarly the children could be in the third street with stories of dead parents.The transvestite gang-members can see that you will handover a 10 rupee note to avoid nuisance,especially in those long-distance trains.
But government organizations,reform houses,religious shelters,social workers,psychiatrists,psychologists and the whole of intelligentsia have failed to decipher the panhandler's psychology ,enough to be able to defeat it.
In Denmark,a prosperous country,I have seen beggars in the main streets and the city-center of Copenhagen.Their style of operation is very different from India.They approach you,stand very close,stroke your back and ask you to lend a coin as if they have known you for years!
A Danish colleague told me,all of them receive handouts from the government,but by the middle of every month - that cash is exhausted on drinks.Although this is an over generalization,her assertion reflects a common belief.Project UDENFOR researching on this phenomena in Denmark,attributes begging to foreign homeless migrants,many from Romania.They hasten to add that people who beg are from a mixed group.
A cross-country comparative analysis reveals Danish beggars are passive in their procedure while Russian beggars are more aggressive.
Though Begging is prohibited in Russia,it is not illegal hence it remains a grey area,coupled with Russia's corrupt administration,trafficking and begging remains a menace there.
In U.S.A,I have lived in a posh Boston suburb.Homeless people who beg there are very casual in their method of appeal.They live in shelters where they are fed,clothed,and all their basic amenities are met.But just like the Govt officials in India had said ,they find it hard to get over their old habits.
In the U.K,where I currently live,begging is illegal.The Vagrancy Act of 1824 makes it an offence to sleep on the streets or to beg.Although illegal,there is no associated jail sentence.
This Act was originally introduced in England and Wales but later extended to Scotland and Ireland.
Until recently it was believed that the Vagrancy Act 1824 had largely withered away through lack of use.But the sharp rise in the number of beggars in British cities and antisocial behavior of some aggressive beggars led to begging being made a recordable offence in December 2003, as part of the Government's initiative to handle crime.
Contrary to the public perception that beggars use the money for drugs or alcohol,researchers in the UK tell us ,begging here is driven by need.Charity organizations,civil groups and lib-dems had criticized the Government's move in 2003 as 'ineffective'.But the law remains today, at least on papers,and unsurprisingly,it has changed nothing.
Is there a universal solution to this phenomena of living by begging?Or perhaps it should be tackled on a case-by-case basis.Alas,I have only questions.The matter which I can unquestionably point out is the universal lack of political will to touch this job.
Thursday, September 8, 2011
Rainy Days and Mondays
I have found a new love for Monday night comedy shows.Something was always needed on a Monday to beat the blues.As a kid,that 'something' used to be the sweets mom made for the family especially on Mondays.
Now every Sunday evening when friends sigh and complain about the work week ahead - I struggle not to get drawn.
I am not a T.V addict,except on Mondays,when the set is turned on as soon as I'm back home.
Something keeps playing in the background while I'm at my chores - before the Comedy show begins.
Just then,I leave everything and settle on the couch.That's also when he comes home,from his Monday evening after-work football practice.
He directly goes to the kitchen to cook dinner.In fifteen minutes I have a plate of steaming delicious food in front of me and him by my side.
We snuggle close and eat our food while watching the t.v.Sometimes the comedy falls flat,so what,it isn't just the show,but this whole ritual that keeps playing on my mind on Sunday evenings whenever I feel glum about the week to come.
Now every Sunday evening when friends sigh and complain about the work week ahead - I struggle not to get drawn.
I am not a T.V addict,except on Mondays,when the set is turned on as soon as I'm back home.
Something keeps playing in the background while I'm at my chores - before the Comedy show begins.
Just then,I leave everything and settle on the couch.That's also when he comes home,from his Monday evening after-work football practice.
He directly goes to the kitchen to cook dinner.In fifteen minutes I have a plate of steaming delicious food in front of me and him by my side.
We snuggle close and eat our food while watching the t.v.Sometimes the comedy falls flat,so what,it isn't just the show,but this whole ritual that keeps playing on my mind on Sunday evenings whenever I feel glum about the week to come.
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