It’s Showtime! Sarabhais and the Markets

Dear Reader,

Hi! I resume the Tweakonomics column in the Hindu Business Line today, after a hiatus of about three months. A very, very special thank you to my Editor Raghuvir Srinivasan for thoughtfully sending in the sweetest email I ever got from the Business Line, asking me to drop whatever it is I’m busy with and get down to writing pronto! Thanks, Raghu!

So, here’ s a piece for Sarabhai fans ONLY 🙂 What happens when popular CNBC TV anchors start talking like the crazy Sarabhais?

You might want to see the article directly at http://www.thehindubusinessline.com/opinion/tweakonomics-on-rbi-fed-and-the-rate-hikes/article9591444.ece

Else, read on here, directly. Enjoy!


That the Sarabhai vs. Sarabhai Season 2 is set to make a comeback after 7 years has taken the Indian public by storm, as the RBI Governor discovered, much to his dismay on a regular, boring, nondescript working day in the RBI. Janet Yellen raised the rates and thankfully, the markets, which had already factored in the move a week earlier, did not show a knee jerk reaction. There was no major outflow from stocks, and the Governor found himself breathing a bit easy. “Let me see what news analysts are saying,” he thought, and switched on the TV.

“OMG! Janet Yellen has raised the interest rates, Mummyji!” shrieked a female spokesperson of Franklin Templeton Investment Funds, in a Monisha-esque voice. “Sahil, mein ghar chhod ke jaa rahi hoon!” Sahil, which in this case is supposed to be the Sensex, reacted positively and went up a few points. “Waaaaaaaaaaaaaa,” wailed Monisha Templeton. “Here I am thinking of leaving home, and your mood is upbeat. Now I know Indian markets don’t value me!”

“Gawd, what the hell is the matter with these folks!” thought the Guv and flipped channels to CNBC, where Lata Venkatesh was looking at the Franklin Templeton move of selling on Indian bourses. “To sell and move just because Yellen has behaved predictably is Foreign Institutionally middle-class”, she said with an upturned nose. “The least they could have done is looked at the UP story and what it means for the speed of reforms in India. What do you think, Rosesh beta?”

Udayan looked simply delighted. “I’ve written a poem on this, Momma,” he squawked. Lata didn’t look too pleased at being addressed thus, but just maintained a stoic silence. To have reacted to this would have been professionally middle-class.

“Janet Auntie has acted like a hawk/ Now the markets will listen to Momma talk!”

Lata was now simply quivering with the effort, but didn’t react to the poem.

“And here’s another one, Momma.

Us waali auntie, US waali auntie, kitna bhi kar lo rates ko hike, hike, hike/

FB par Sensex ko hi milenge like, like like!”

Deafening silence on the show.

“How is it, Momma.”

“Why don’t you take a break, Udayan,” said Anuj Indravadan Singhal, with clenched teeth, “before I break somebody’s head here. This show is called the closing bell, but any more poetry from you, and we’ll have the show closing before the markets do. And yes, Maya, let’s have a cheeseburger on the Breakfast show today!”

“I thought we’re here to discuss the heavy weight stocks, and not ourselves become heavy-weight, Indu,” said Lata, icily. “How about food for thought?”

“Here’s Maya in top form, folks! Why don’t you take a break while my heart breaks from the lack of sympathy on this show..”

“This is it! Everybody has gone complete nuts!” thought the Governor, switching off the TV as his special hotline rang softly. The ring tone was Mittrrrrron.

“Looks like politics is controlling economics, Urjit. Markets are up, Congress is down. I sometimes wonder about the NCP though. Can it pose a threat at the local level?”

“NCP? Unki ghadi kahaan kaam kar rahi hain?” said the Governor, before he’d realized he was being Dushyant. Horrified, he tried to cover up. “I mean, Sir, errr…”

But he was met by a chuckle at the other end. “You’ve been watching too much TV, Urjit!” the PM said laughingly. “Ye jo najar aate hain, Mittron, Ye toh woh hain nahi…”

 

 

Econ Mom and some Potter Magic!

There’s double trouble at home.

Lil One’s going to be writing his final exams this week and the next. That’s big trouble. Oh, no, no. Not for him. He is having his usual good time. It’s big trouble for me, you see. And as if this isn’t enough, there’s this addition to the trouble…

Lil One is reading Harry Potter. Aaaarrrrgh! For the third time. The first two were not “proper readings, Mom. I wasn’t mature enough to understand it properly then!” is what he told me, to my great amusement. Further, he’s apparently decided to set a world record by reading all the Potter books inside two weeks, ummm, the same two which coincide with his exams. Help!

Quite a scene we have at home, these days. I sit patiently reading about the many wonders of the rectilinear propogation of light and tissue culture, whilst Lil One giggles at Peeves pelting chalk at Harry, calling him names such as “Potty”. While I despair the splitting of the Maratha empire between Shahu and Rajaram, Lil One is deep inside the Pensieve looking up the Prophecy connecting Harry to Voldemort. I wage the war against complex geometric problems while Lil One goes looking for Hallows. God! I never thought there’ll be a time when I start….disliking Harry Potter so much!

Yesterday, when I asked Lil One to get some water half way through our dinner, he held his spoon in the direction of the bottle and yelled “Accio Bottle!” When I threateningly made big eyes at him, he accused me of using the Imperius curse on wee kids to get my bidding done. Whenever he sees me approaching him with a textbook in hand, he yells “Dementor Attack!” and shoots the Expecto Patronum at me, with Hubby looking on with frank approval and complete admiration in his eyes. And when I asked him, for the fifth time, to sit down with me to plan how he is going to complete reading 8 Geography chapters in 2 days, he actually muttered “Langlock!”

Following are some of the sweet nothings he has shot at me over the past few days. GRRRRR!

  • I am the most boring mom in the world.
  • Correction. I now have the distinction of being the most boring person in the world.
  • That Ron lost half his eyebrow in his apparition test is infinitely more interesting than the fact that the Marathas lost more than half of their kingdom at Panipat.
  • The Marathas should have taken Katappa to Panipat with them.
  • Geography is studied by girls. Boys do only Maths. In that, only Algebra. In that, only linear equations.
  • Linear equations are the new cool. Everything else is “Muggle”.
  • Lucky me! I am going to be cast in the movie made by Lil One on Harry Potter. So far, I have completely qualified to be Bellatrix, Kreacher and Nagini. If I learn to be dreamy mad and not my usual aggressive mad, I can even audition for the role of…hold your breath…Prof. Trelawny!
  • Tenses are designed to make kids tense. “I have had it!” is present perfect and is presently perfectly designed for Mommy dearest.
  • I belong to the past tense just because I happen to know that Munshi Premchand wrote “Godaan”
  • Auto spell-check wands are required to solve the Hindi and Marathi papers
  • Any woman who enjoys Hindi poetry cannot be in her right mind. She deserves to be immediately visiting the St. Mungo’s Centre, where they apparently treat witches and economists.
  • Engineers are wizard. Economists are obviously Muggle.

“Nope!” said Econ Mom suddenly. “That last one is not okay.” How can economists be..Muggle?

Isn’t it us, who alone know the deepest secrets of magic of the societal reform. We, who are almost Goblin-like in that we imbibe all of that which strengthens us. We’ve taken principles of Maths to create models out of the most non-modelable phenomena ranging from shopping behaviour and drug trafficking to corporate incentive structures. We’ve woven principles of sociology to create HDI. We use political contraints to understand how economic equilibria may turn out to be sub-optimal in a social welfare sense. And we’re the only ones who’ve been able to make robust, significant, least error use of that crystal ball of statistics, called as forecasting. It is us, who create those models and sell them at crazy prices to a world zapped with knowing the future; and yet, we have the simplicity and enough humour to call our art, a bunch of econome-tricks.

The Elder wand of good policy intervention can certainly weave magic into comatose markets; but sometimes you do need that invisibility cloak, or well, at least invisible hands to drive animal spirits. That economic reform has been the resurrection stone for economies ranging from Brazil to China and Zimbabwe to Germany is a principle undisputed across the globe.

Make no mistake however, by going overboard in the hallowed presence of this amazing science. For every hallow that the subject has produced, there are those horcruxes; scams, currency crises, bankruptcies born out of the misuse of economics that split societies time and again, towards nothingness..

And on a lighter note, hell, we even have a Ministry of Magic! Yeah, its known as the Ministry of Finance to the more innocent. And it often has the cheek to try things out “for the greater good”; it is blinded, in Dumbledore’s words, by the love of the office it holds. But worry not, because it is precisely in order to check this, that we economists have created yet another institution, the Hog-Reserve Bank of India, headed by none other than Albus Rajan.

So all in all, Lil One, nope, your last argument is not acceptable. One day, when you are older, you may realize the power of this wonderful subject. And maybe you’ll come to love and respect it the way I do. And maybe, we’ll be able to bond on this, the way we do on Potter, and Tintin, and late night coffee, and crazy jokes and music. Till then Lil One, let us step into the night and pursue that flighty temptress, adventure.

Econ Mom visits a doctor

I was feeling a bit breathless and wound up. From a variety of friends, I got only one response. “I think you’re working too hard. You need to relax.” And from the one quack in my life, Hubby, I got a variety of responses ranging from “It could be the pollen count” and “OMG, is it asthma?” and “You are working too hard” to “You need to talk less” and “You definitely need to argue less.” Hmmmm. Exactly the type of response that warrantees a good argument.

Anyway, upshot is that Hubby took me to an allergy specialist, who’d apparently cured him around 20 years ago, for an opinion. Hubby is choosy about his doctors. He doesn’t like most of them and feels that most don’t match up to his superior quack skills. But even quacks can be smitten. And Hubby loves this doc. After all of the medical faculty apparently failed to even identify the allergen that had struck Hubby 20 years ago, this good Doctor had breezed in and cured my quack.

And, a quack once smitten, is hard to cure. I have spent the past 14 years of my marriage hearing stories and stories about this Superman. Well, however, with no trace of allergy at all in both of us, except for the severe one which we developed for each other over a period of time, we never really had any reason to meet with Superman. But this time around, I had no option. Hubby was pretending to look quite worried about my breathlessness, but I am sure inwardly he was quite looking forward to meet the Messiah.

And so the great meeting happened. After 20 long years. I was relieved when Hubby didn’t breakdown or something and made some general wheezing noises to remind the two of my presence and the true reason of our visit.

Well, Doc got me talking. “And what do you do for a living, Manasi?” “Well, I’m an economist and…” “Really?” Doc looked up with a grimace. “Economist?” he said, with such apparent disdain that I was thrown off track from allergies and breathlessness issues.

“Why?” I asked a bit defensively. “Oh, nothing. Anyone with any heart disease/ history/ disorders?” Was the measured response. “No”, I answered grumpily.

“Oh, but your great grand-father died of a heart attack!” that was Hubby, determined to get some data for his fav Doc. “Yes, but that was not a disease. I mean, there was no history…” I faltered as Doc raised his eyes to the ceiling and said “Aaaaargh! Economists!”

Really, now this was too good to be ignored. The allergy doctor obviously has some kind of an allergy to economists and I am going to cure you before leaving, I grinned to myself.

But there was no time to cure him because he suddenly pushed a machine into my mouth instructing me to make rude blowing noises like a dying hen while inhaling and exhaling through the damn thing. Hubby was staring appreciatively at the whole process. It can’t get better for him, I thought grumpily. He’s reliving his past through these idiotic noises I’m making and is in the presence of his fav Doc and wife’s red in the face and looking like a fool. Oh, I’ll get you, I thought, blowing some more air with vengeance into the strange contraption.

After the ordeal was over and I was back to my calm and collected econ-self, I asked Doc, “Errr…so, do you have a problem with economists?”

Imagine my surprise when the guy said cool as a cucumber, “Well, I think they’re all crooks.” Now really!

He continued “Have you seen the Inside Story? Crooks, all of them. And when Raghu (first name basis with my fav Guv!) wrote a paper on it, they blasted it…”

“Larry Summers blasted it,” I said helpfully.

“Yes, him and the earlier Chairman.”

“Alan Greenspan,” chipped in Hubby, earning himself an appreciative glance from Superman.

Now Doc was getting into form. “Summers and Greenspan and Paulson. Oh, they created the problem. And then who was put in charge of solving it? Summers and Greenspan and Paulson! Crooks, all of them!”

Ok, now I know what’s wrong. My diagnosis was ready. “But Doctor, surely you are not going to base your opinion about economists based on one popular movie. I’ve read all the Robin Cook books and then that’d mean that I’d believe that all doctors are people with devious intentions out to genetically modify people or get their organs.”

“Hahaha, this is not a discussion of your profession vs. mine. Look at the results. Economists generally don’t seem to be able to diagnose the basic health problem properly is what I’ve noticed. Are we doing well in this country? Are we doing well anywhere? We seem to be breathless with problems.” Nice one, that! I like this guy.

“So Manasi, you’ve to see me again next week. It’s a nasty allergy, this one.”

“”Yes, Doc” I replied with an evil grin. “You’ve got a real nasty allergy. I’ll meet you again till I cure you completely!”

PM Modi’s Big Boss House!

Dear Reader,

Hi! When PM Modi hosted industrialists and bankers at 7 RCR, I couldn’t help thinking of the Big Boss House with the dramatic inmates! Well, so I created a satire piece out of this, which appeared today in my column titled “Tweakonomics” in the Hindu Business Line. You can read it directly at http://www.thehindubusinessline.com/opinion/columns/pms-big-boss-house/article7633818.ece or you can see it here. Enjoy! And do post in a comment with your views!

—————————————————————————————————-

September 8, 2015. There was a flurry of activity at 7, Race Course Road. After all, PM Modi had decided to host the Big Boss show in his own house. The who’s who of industry, banks, industry associations, ministries, mutual funds and the RBI would be called in as inmates. The event was bound to be full of masala and histrionics.

Inmate selection had been a nightmare. Cyrus Mistry had been extremely ruffled by the huge outlays that Big Boss had promised on roads and infrastructure in the last budget. “After all the pain we took to create a toy car which can navigate all the potholes! This guy is going to kill my small car business!” Even after 10 phone calls from the PMO, the man refused to attend. It was only after FM Arun Jaitley cleverly pointed out that there is a difference in outlay on roads and laying out the road that Mistry came to the House.

Sunil Mittal pooh-poohed the whole idea of having a physical meeting in digital India and offered 5G connections to ModiG. “What an absurd idea!” remarked Kumar Mangalam Birla, deciding to nominate the Airtel candidate for eviction immediately.

“Hehehe. Do what you will, guys, but end of the day, there’ll be only one winner. RIL.” That was Mukesh Ambani, the one inmate who had immediately accepted the Big Boss’ invite. He had already won several Big Boss seasons. Mallya did not have dates in his calendar and was not invited.

Culinary conundrum

There was a big issue over who would cook. Chief Economic Advisor Arvind Subramanian, having established himself firmly in the culinary department with the introduction of JAM (Jan Dhan, Aadhar and Mobile scheme) in the Economic Survey, was called in to cook up some steam in the stale economy. Pancake would be cooked by Panagariya, the other Arvind. Minister Goyal, the “power” factor, was jealous of Minister Dharmendra Pradhan, whose job of supplying oil at low prices was being undertaken by the Saudi Prince himself.

The Governor of the People’s Bank of China Zhou Xiaochuan was invited as the firang guest. However, he cleverly declined seeing that the mutual fund inmates had donned “khali” looks at the mere mention of yuan devaluation. It is a nice game of thrones, thought Big Boss, with the policy team at loggerheads with implementation. “Take risks!” he boomed and the game began.

The games begin

RIL wanted all taxes to go; no I-T, no MAT, and certainly no GST. It also demanded no SIA and no ecological assessment when it acquired land. FM Jaitley, startled at such extreme demands, remarked that Mukesh needs to be the next FM. Mutual funds wanted bears out of the house. The bears said volatility needs to be evicted. The industry pointed fingers at banks for keeping rates so high. SBI chief Ms Bhattacharya bristled visibly and asked why the inmates had taken loans they couldn’t repay.

“But why don’t you reduce interest rates?” There was a sudden silence as Big Boss spoke. Ms Chanda Kochhar delicately looked at her empty glass. “No liquidity, Big Boss.” RBI Governor Raghuram Rajan, who was brought in to keep “interest” on the show high, started uncomfortably. No matter how slowly the government moves on critical infrastructure, he knew that eventually his interest rate policy would be blamed for the slow pace of investments. “The weak transmission,” he began but was shouted down by the other inmates. The show had begun.

Big Boss smiled. He could see his TRPs going up.