Mortals and random numbers

"Sit and write 100 random numbers and upload it in the software you are developing!"

By this statement, I was not playing a fool.

My friend, at office was trying to figure out how to generate an extreme random number using a computer language. We can provide logical process to generate a random number everytime, but then they are not really random. We came up with solution 1 to increase the randomness of the number. It looked like a brilliant idea. But we forgot something intutive.

Can we quantify randomness? A number is either random or its not. Its like a yes or a no. I would be wrong if the below conversation makes any sense-

Person 1- Is it raining?
Person 2- Eighty three

It is at this point I invented another method by which the ultimate number can be generated. Thats when I had this idea and I said what I said (Refer to the 1st line of this article).

Us mortals are the only ones who can generate true random numbers.

What we didn't realise that we were discussing the secrets of life in the light of its very definition or something similar. It felt like something we already knew.

Rice and communism

Speaker of the house is not the surround sound music system installed in the parliament.

This wisdom of Scott Adams was little realized by the left party before the previous elections.

Once in one of their party meetings somebody remarked that Trinamool Congress was a serious threat. Everybody laughed uncontrollably. Some fell of their chairs and rolled on the ground laughing. Everyone has a good sleep that night.

They were the ones with all the guns.

Then came the Singur issue. To compensate for the incompetencies of communism, they decided to forcefully sell lands at an extremely cheap rate to the very corporate their entire philosophy does not recognize. When Mamata Banerjee got angry, they thought it was just the wrong time of the month for her. But things escalated.

They had eaten too much of rice to do anything about it so they called for a strike. They had a nice holiday and everyone had more rice.

We all know how it ended. Mamata Banerjee laughed her way to the vote bank while the Left collected pieces. Now, the oil price rise is a serious issue for them. It may lead to inflation. The communists were not happy. Not only are they loosing popularity, they have to pay more for rice?

As the regional politics unfolded, we saw BJP flags on Howrah Bridge. The only reason I wouldn't vote for BJP is that they would further complicate the situation unnecessarily.

A marwari cannot have a perfectly inelastic demand curve

"Itz not because he is an MBA, but because he is a marwari."

Shraddha corrected her mother when she was impressed with my bargaining skills. I couldn't disagree.

There is a reason I support Mamata Banerjee. Even though living in Bengal, there is a part of my blood which belongs to the marwari community which is always actively involved in continuously blocking my mind from comprehending communism or anything that is even remotely related to communism.

The elasticity of demand for a good would always be different for a Punjabi, Gurati, Marwari or a Tamilian. Marwari economics can be a new field of study altogether. I guess a true economist has to be a racialist. But they play safe. The non- existence of this problem is another one of their cleverly drafted assumptions.

Taste and preference remaining constant.

Is rise in sugar prices good for fat people?

What is a giffen goods really?

Is it only bread buns sold to unskilled Afro- American workers by the Democrats in 1910? The economists should move on.

Rise is sugar price might seem like people will reduce its intake, but thats when the giffin's law comes in. Since price of sugar rises, people just might substitue sugar to other products they cannot really afford now. Then the elasticity of demand for sugar becomes backward sloping.

Everyone needs sugar in their life. They need it more, when its costly.

A crisis and a game of monopoly

I remember playing monopoly. It was buying and selling land with made up money.

To quote Marge simpsons- "The game's crazy enough ..... How can an iron be a landlord?"

Its similar to the sub-prime crisis. People created false money to buy and sell lands. The money could either be traced to a loop of creative financial instruments or US Dollars which in turn would lead us to Fed Reserve's overworked dollar printing machine. Everyone felt good for some time. Then, the game got over.

Then they put the money back into the box, and closed it.

Maths can explain why Gabbar laughed so loudly

Hindi movies are more than we give them credit for.

There are always reasons why things get famous. I am talking sholay.

Everyone remembers this scene. He took a six bullet pistol and put in only three bullets and tried shooting his fellow dacoits one by one. None of the first three tries were a hit. Then all of them burst out in uncontrollable laughter.

Why did all of them laugh?

Lets see the probability implication of this evet. The probability that first fire would be empty is 3/6. The probability of second fire being empty is 2/5 and the third fire is 1/4.

Total probability= (3/6)*(2/5)*(1/4)

The probability of that happening was only 5%. Gabbar found humour in the probability trying to protect them from his terror. He laughed at the laws of the universe which thought could defy him. Then he shot them anyway.

Einstien agrees for a completely different reason. To quote him-

"God doesnt play dices."

Zimbabwe declared inflation illegal

What about the fundamental rights of the economists?

Inflation is a natural occurring economic phenomenon. How can it possibly be declared illegal? They actually arrested some company officials who increased prices.

The inflation of Zimbabwe was so high, the company that printed Zimbabwe currency refused to do so anymore. Government promoted using currencies other than Zimbabwe dollars. Even so, that Zimbabwe's National postal service started charging people postage in US dollars.

It took me some time to count the zeros in their economic numbers. 231000000% is not a very appreciative inflation figure.

This is what a real crisis looks like. A land where probably the cost of paper is more than the denomination of currency printed on it. A land of starving billionaires.

People in Zimbabwe are still not sure how to react-

"I just bought a chicken burger which cost me 30 million Zimbabwean dollars "

And we call what happened in US a crisis? I am not a pessimist, but lets all stop printing dollars.

Feng Shui Masters see calm stock market in the year of ox.

"You would rather become a fortune teller"
I met a very interesting person. He opined that Fundamental analysis not only dint make sense, but was morally wrong.

The Chinese Feng Shui had better predicted the markets in 2008 than any fundamental analysts. They somehow knew about the meltdown. They called it a year of rats. But good times are expected to come now. The water elementals will somehow cool the stock markets and then in the year of Ox the markets would eventually calm down. Ox is apparently linked to Earth elemental which is relatively calmer than elementals in the year of rats.

I have eventually got some directions. Fundamental analysis without following up with the five elementals of the universe is irresponsible investment advice.

Axis is not an imaginary line

Anil Ambani removes Mukesh from his facebook friend's list, Sensex down 200 points.

I read this in one of the funny news. Anil realised this in a Texas Poker room where his wife could chat with Mukesh, while he could not. Indian stock market got sentimental about it. Its surely funny but also something to think about. We are not even sure how to pronounce finance-

Is it pronounced /fainaens/ or /fInaens/?

The underwear index. The US analysts came up with a new index to measure the economy. They found the sale of underwear in US had fallen due to recession. This was unusual as underwear has always been considered as a necessity than a luxury. They figured that although people still wore underwear, but now they were more dirty.

Is it just me or are we really missing a point here????

Warren Buffet would bank on Earth's axis and buy stocks selling Air Conditioners when the axis running through his part of the planetary hemisphere is away from the sun. As long as we rotate, there will be a day after night and the world will completely turnaround everyday.

There is a reason why Warren would buy sweaters only in summer, because Earth's axis is not an imaginary line.

Lets not ignore Australian markets

No one cares about Australian financial markets!

The global financial community is totally ignoring Australia. Its kind of rude. They don't affect the international markets at all. Australian indexes are not that useless. I am sure they indicate something.

Think about the amount of money Australians can make selling kangaroo skin!

"But what about global warming?"

Richa rightly objected. She took a long term view. Because of global warming less people would be wearing warm clothes. Kangaroos are useless indeed.

Varun just finds it very funny.

"They have pouches..... how ridiculous is having a pouch...."

Correct Temperature Soup

What does goldilocks think of herself? She breaks into a strangers house, drink their soup, and is still complaining about the temperature of the soup. (Bart Simpson outsmarted her, he mixed the hot and cold soup, and drank it.)

When she was found sleeping in the baby bear's bed (apparently other beds were too big for her), she made another big mistake- she ran. Everyone knows we should never run when we see a bear. We should pretend that we are dead (not that we would be pretending for long). I guess that's why the story ended there.

By the end of 2008, we were introduced to the characters again. Goldilocks (bullion) and the three bears again (equity, debt and forex). When the bears were out, people made career decisions to sell gold. Now that gold is reaching new highs, I can safely say it was a huge mistake :P. No one has any clue how warm they wanted their soup.

Astrologers disagree. They call Earth, the Goldilocks planet- neither too hot, nor too cold). Perfect for existence of life. There is a quote in "The Simpsons" on a winter Sunday morning.

"Thanks to global warming, the weather is pleasant"

The training at Irevna has taught me a very important lesson- soups have no temperature.

The American

Even before my train had left the platform, I knew it would be a long journey. Sitting next to an oversized American I read- “Sensex reaches a new low.” In long journeys I use books and magazines to avoid the awkward silences with complete strangers. So I continued my pretence of reading India Today- “Sensex reaches a new low”.

Every time I read something like this, I die a little bit inside. When I joined my MBA in a particular year, I was forced to time the market. Some might call it luck (or rather the lack of it) and some might call it destiny but the bears have freaked up my returns (placements). But today I had someone to blame it on. The American smiled at me. To my convenience I speculated he was interested in what I was reading.

I read out aloud- “Sensex reaches a new low”
He responded jokingly- “What should I say, I am sorry”

I felt a sense of guilt for making him apologize and shifted a bit to make more room for him to spread his legs. He did. We got talking. He was a strong supporter of The Republicans (although he never voted). I enquired if he had purchased land recently. He had. Rented it out but pretended my question had nothing to do with sub-prime crisis.

And then it happened. My semi-spiritual experience. An IRTC official tried to sell him coffee. To the ordinary coffee seller, the dollar was surely worth less. But his hundred rupee note was also rejected.

The man demanded- “Change?”
I explained- “You need change”

The American needed change. He couldn’t obviously get rupee of his required denomination out of thin air. It was too late. The coffee vendor would not wait long. I guess it was too much for him to bear. Amidst the confusion, a coin fell from his pocket. His words were like poetry to me-

“Rupee has fallen”

Fed Bank’s theory of eternity

Albert Einstein once said- “I have just got a new theory of eternity”. People at Fed bank could not agree more. At the edge of every such perceived eternity is a bubble burst. Just like we witnessed in the sub prime crisis where everyone expected the real estate boom to go on forever. Now we need to be careful- what else does the Fed Bank think would go on forever? Have we seen it all in the sub prime crisis or is it just the tip of an iceberg?

US never runs out of solutions. Bank of America has acquired Merill Lynch. Just another smart move by Americans- one bankrupt company acquiring another bankrupt company. As if they were not doing badly enough by themselves. Its like both companies have huge number of defaulters and are using each other as a guarantee. I am sure the US Government is smarter than this. But there is more. What did you use in the deal? A worthless peace of paper which they call dollars. The Central Bank of US is trying to save Fannie Mae and Freddie Mac which I think is a greater matter of concern than the fallout of Fannie Mae and Freddie Mac itself. Let me explain how.

Long back, a fed bank spokesman said- “dollar is my currency but your problem”. He just might have a point there. US dollars have this special position in the world as it is most commonly used across the globe as a medium of exchange, even between two currencies. We see central banks of many countries keeping dollar as reserves. Why? Is it because it is considered the safest, even safer than the gold? The US has been long importing goods by printing more and more dollars. If the central bank of a country has enough dollars, it sells it treasury only to pay it back in dollars with interest. All any country is left with is more dollars.

So we have here a country in the middle of its biggest regulatory failure printing dollars with sky as its limit. How else could it save AIG or others? Would you call it a smart move? Doesn’t US have anything to loose if its floods the already flooded market with more dollars?

Now either they can print dollars till eternity or there will come a day when people will stand up and say- “we have had enough of dollars, now what about some real money?”

Don’t eat the yellow snow

On 15th April, 1987, there was panic in USA. 7 million children went missing overnight. 7 million amounted to 1 in every 10 dependent children in the country. It was something unheard of. What could possibly be the reason? Steven D Levitt points out that this was because a new law which was enforced where every child eligible for deduction from taxes should have a social security number. So all the fictitious dependent children existing only in papers for tax deduction (connected to some 1040 form) vanished overnight.

Now days we see that everyone is talking about Chinese goods being so cheap so much that they have a new term for this- Chinese price (which means cheap price). Is their production so efficient that no country can beat it? The truth is that they have artificially devalued their currency against dollars and so whatever they export is cheap thus also causing a global imbalance. To add to this US has been printing dollars like there is no tomorrow. (For them, that just might be the case.)

Mr. Bush (how does he sleep at night) justifies his action affirming all the time- 9/11 CHANGED EVERYTHING. Whatever happened on 9th of November! (they are the only country who dates things this way). Meanwhile across Atlantic Ocean, UK doesn’t go public with their M1, M2 or M3 data (I am not sure what they are, but apparently they are very important).

Coming to India CITI Bank was busy selling its office furniture and I read a statement made by a senior CITI Banker. He claimed that the sub-prime crisis was not effecting its operations in India. I am also in the opinion that it makes sense that in India the Government employees do not pay service tax- they hardly provide any service.

Okay, now here was a list of non connected information. Now what should we infer from that? I would like this opportunity to quote the greatest letter ever written which I feel is somewhat ignored my mankind. It’s a letter from Mahatma Gandhi to a non- German- Hitler (he was an Austrian).

“It is quite clear that you are today the one person in the world who can prevent a war which may reduce humanity to savage state. Must you pay that price for an object however worthy it may appear to you to be? Will you listen to the appeal of one who has deliberately shamed the methods of war not without considerable success? Anyway I anticipate your forgiveness, if I have erred in writing to you.

I remain,

Your Sincere friend

M. K. Gandhi”

Master Frank Zappa explains all this with a beautiful story. Its about the naughty Eskimo who ate the yellow snow. A stranger from the commercial world took a cone of yellow snow (from where the dogs go) and rubbed it in his eyes. And since then the Eskimo cannot see, temporarily. The commercial world has stripped us of our sight. If we sell our soul and earned money, is it actually smart business? Reaching for glory we have to also see the price we are paying for it cause any castle built on lies is but temporary. You can ask the president of United States (or Uma Bharti for that matter).

In words of Homer Simpsons- “Money cant buy everything, for example dinosaurs”

Do monkeys eat bananas?

With a little embarrassment I borrowed a book from the LIBA library. A yellow book named- “stock market for dummies”. Why? Because looking at the stock market from a dummy’s perspective just might not be that bad an idea. Here’s how. Every second person you meet who invests happens to be a market expert (of course it would reflect differently if you check their portfolio profits). I was looking for a different approach.

What am I trying to imply? We are all looking for patterns in technical and fundamental analysis using our logical reasoning. (I won’t even mention the number of trading that goes on based on market tips and rumors, dhoh!!!). They think they know it all. And why shouldn’t they? There is pattern everywhere. Or is there? There are other people who believe that stock market follows no pattern. Its fluctuations are random with no logic. So this brings us to the debate- are stock market movements random or it follows some logic. I looked for answers in one of the greatest conversations ever-

”Einstein: One tries to understand in the higher plane how the order is. The order is there, where the big elements combine and guide existence, but in the minute elements this order is not perceptible.
Tagore: Thus duality is in the depths of existence, the contradiction of free impulse and the directive will which works upon it and evolves an orderly scheme of things.

Einstein: Even the red flower I see before me on your table may not be the same to you and me.
Tagore: And yet there is always going on the process of reconciliation between them, the individual taste conforming to the universal standard.”

And it brought me to the next question- Why did the chicken cross the road? Was there an underlying reason or was it something as random as a chicken actually crossing the road? Is there a higher pattern in all these uncoordinated activities or these higher patterns are by itself something uncoordinated? I was simply left with more questions.

I know what you are thinking of right now- where does a monkey eating a banana come in? Is it something random or does it have a meaning? Lets ask ourselves- why are monkeys universally associated with bananas? Lets think clearly. Their diet includes fruits, berries, seeds, leaves, grass, herbs, shrubs, crops, insects, eggs, birds and rodents. They love to eat flowers. So does a monkey eat bananas all that much? Then why is everybody mindlessly making such association?

What I do not know must be true, or else I would be super rich.