I just got the wittiest answer to “What is recession and depression?” During my various reads on recession, recently I encountered a definition “When your friends and people around you lose jobs, it is recession, when you lose job it is depression.” Everybody must be having their own bouts of stories around recession, me too. Today, when I just go for a stroll in the neighbourhood, and when I see people talking on the phone, I surely hear the words “recession” or “Job”, at least 5 out of 10 times. The other day I was with my colleague in the car, going for a customer meeting, he is one of those chatty types; he got all the calls mentioning about the problem in job. Some have lost it or some have just got the reduction. After a bout of those doses he commented “Sir, recession has gone to its worst”. I maintained my silence and kept on pondering again on recession.
I have already spend a day in Satyam’s” city, two more to days to go. We just had a few sets of customer meetings already, could sense a mixed bag of response. In this recession we still are braving an I Idea to have office in Hydrabad, this was to the utter surprise of many and relief to few. The silver lining for us is getting new sales of service personal s not going to be a problem assured by everybody almost anonymously. I have an etching feeling to start with yet another venture for consultancy on ERP solutions to SMB. To this regard I was speaking to a friend, who works for the large software company also in ERP. I told him “Yaar, I want to still start this venture”, he said that “Situation is very gloomy, last Friday our company announced lay off, We had large crowd of people coming on Saturday to check if there access card still works”, I contested “I understand this, but don’t you think that it is the right time to take the plunge, opportunities also comes along with recession”. He was not able to digest it probably and kept silent, or he thought that I am foolishly optimistic. Hence I ended the discussions with “Think about it, we must not lose an opportunity”.
Well, Now I have little addition to make to what my CFO friend has to say, as mentioned in my last blog on recession. Situation is going to decline further then what reflects of all the misdoing that the perpetrators of the recession has envisaged on us. It is now probably going to have snow ball effect in the economy. Recently the economics pundits have started giving their analysis on the down turn which rather not so discouraging, just thought to put in some points:
1. US should rebound sooner than the EU block and Japan. Its heart warming to hear that they have already started seeing the revival of economy. I am just thinking, if it means that we are over with the bottom stuff, or the economist was one of those optimistic kinds.
2. India GDP growth at 7% might be still higher a target. They say agriculture should contribute about 1%, Industry about another 1% and services about 4%. Hence 6-6.5 % GDP growth should be in realistic term. Still better then the negative growth in GDP widespread.
3. I have saved this for the last but this has gladdened my heart the most .They say you need to survive till December 2009, the first quarter should start seeing the upward trend quite distinctively. Ah, if this is true, I think we almost worried uselessly. I do not even want to imagine the consequences of them being wrong.
Recently, Obama announced that all the companies benefitting from the mother of all bailout packages will not be allowed to outsource the jobs outside USA. I understand that this is short term setback to Indian companies, but this should be good in longer term. What he has tried to do is to try to get the maximum effect of the bailout package on the domestic economy. Once the US economy is on track, it is any way a good omen for the balance. Remember, when they failed the world suffered.
This is February and in Hyderabad it is already scorching hot during the day. Traffic is maddening; no body follows the traffic rules nor give any heed to the traffic policeman. The rule is simple just follow the car bumper to bumper and forget about everything, people who need to cut across just need to wait for the gap, once you give room to the other ,you and your side of traffic stops and now you need to find your gap. What a traffic rule? Probably our friend Raju got some of his ideas from here.
We are talking about recession, meltdown, slowdown etc. etc.- new names for depression. What all these are? These are jargon created by so called Financial Engineers who are busy giving attractive, acceptable but deceptive name to various "acts" like CDS stand for "Credit Default Swaps". CDS market was USD919 in 2001 billion which rose to USD 62.2 trillion by 2007. The national value of all outstanding global contracts for derivative transaction by 2007 reached to USD 600 trillion a decade back it was USD 75 trillion. In 2003 itself Warren Buffet, as a warning, described these instruments as "Financial Weapons of Mass Destruction".
ReplyDeleteThe root of economic crisis is in USA.The sub-prime crisis in US led to collapse of their Banking System.
The best outcome of this financial crisis may be emergence of a new world economic order devoid of extremes of communism and capitalism and which would be based on integral humanism. Instead of talking of GDP we should talk of GNH - Gross National Happiness.
Well, all said and done, what should I do in this situation. DO NOTHING. That's right. Escape to such things which you always wanted to do but for which you never got time - holiday tour, reading books, wholesome time for your family and parents, training for yourself of management or spiritual or development or any thing else you can think of.
But remember what Warren Buffet has said for 2009 - spend what is left after saving.