And the I-Banks came tumbling after... : The Subprime Mortgage Fiasco Explained

I know this write up is coming in, years after the Funeral is over..something like a posthumous Award..but nevertheless...finally managed to put my thoughts in an objectivity to churn what actually happened in the Sub-prime Fiasco,why are the I-Banks tumbling like a pack of Cards...

Hmm...well, it all began with the sub-prime crisis. If you lost your money in the market crash of January 2008, here's the route to your loss, in chronological order.

2001-2005: House prices in the US begin to rise rapidly. Banks lend aggressively and create a sub prime industry.

Sub-prime lending refers to lending (at slightly higher interest rates) to people who may not be eligible for a loan under normal circumstances. Maybe they don't have a regular job or income, or have defaulted in the past. Banks traditionally did not lend to such people due to high risk of default. But since these loans were mortgaged against property and property prices were rising continuously, banks started doing so. If customers defaulted, they could sell the mortgaged property.

2005: The booming housing market halted abruptly in many parts of the US.

2006: Prices are flat, home sales fall.

February 2007: Sub-prime industry collapses in the US; more than 25 sub-prime lenders declare bankruptcy, announce significant losses, or put themselves up for sale.While they were lending, banks did not factor in the possibility of a fall in property prices. When the Federal Bank (the US equivalent of RBI) started increasing interest rates, the sub-prime borrowers started defaulting and banks started selling off the mortgaged properties. As more and more properties came into the market for selling, the property prices fell.

August 2007: Many leading mortgage lenders in the US filed for bankruptcy

March 2008: Bear Sterns falls.

September 2008: Lehman Brothers file for bankruptcy. Merrill Lynch sells off to Bank of America. Between 2001 and 2006, the US financial markets had developed a new product – a bond securitised against the mortgages.

In simple terms it means that the mortgage banks borrowed money against the mortgages on the condition that they would repay to lenders as soon as they recovered their mortgages. The lenders in this case were financial institutions (like Bear Sterns, Lehman and Merril Lynch) who in turn sold retail bonds to individuals.

Sadly, the repayment never happened.

And institutions like Bear Sterns, Lehman, Merrill Lynch and AIG were the casualties. Since the mortgages were not honoured, the banks could not repay these financial institutions who in turn could not repay retail investors.

That my Friend, is how the Cookie crumbles...

Chronicles of a Non-Smoker !

Dark & Chapped Lips, Roughed-out skin, smelly fingers, bad breath, Yellow Teeth, Stink, Burnt upholstery, High Metabolism, unnecessary Money expenditure, Hatred, indifference, etc etc..is something a smoker goes thru during his tenure as a smoker..

Want to get rid of them all...simple... Quit Smoking :) I know...its easy said than done...

"Well, I managed to take a break from smoking" and as of now, its been 46 days since i kicked the butt.

From 15 Cigs a day to Zero is quite an achievement. The date (Just for the records) was 16th August 2008 @ 9:30 A.M

This was my second attempt at the deed. The first one lasted close to 2 weeks.

2 attempts in the last 10 years of smoking...gosh..i remember every time i thought of quitting smoking, i used to light one to aid me in devising a quit plan strategy :)

How and why now? i m not making this substantiations for the readers but to myself...

How : Took myself to a Certified Hypnotherapist, Mark Beale, underwent the therapy...its a 3 week course...and as i was starting to put the plug on the habit, i went and got 2 of my wisdom tooth extracted...this sealed the deal....and ever since i haven't held a Smoke stick again....

Why Now: Had enough...wanted to give my lungs some breathing space and fresh air other than TAR..I gotta save some money...slow down that metabolism within me...and of course, this is not for any woman in my life...

I feel nice...and i put on 3 Kilos in 3 Weeks...wat more do i need?

All i gotta say is "I m a Non-Smoker, Now and Forever"

Disclaimer : Readers, please donot assume that i m trying to preach to smokers not to smoke..thats not possible...Smokers will quit, when they have to...its only a matter of THAT Moment and situation !

(Note : Forgive me for the Unstructured Flow of thoughts, been out of touch for quite sometime now and writing seems so Difficult...)

Art Of Living Magic

For the last 3 years i have been contemplating taking up a Course that would help transform my life instantly..something with quick actions leading to quicker visible results...over the years, i have read Self-Help books, watched videos and tried putting them into practice but have failed miserably at it...

Well...i guess all good things happen when u least expect them to..one of these days i was grocery shopping and while i was waiting for the bill to be generated i saw this poster which spoke of a Beginners level in Art of living and it co-incidentally(thats at least what i feel) seemed to answer all my questions about a life turn around..

So after a week of thinking and re-thinking thought i d enroll for the course as it was a meagre Rs.1000(Considering it is equal to money spent over a weekend)...and from my previous posts u wud have realised that, Morning for me starts only at 10.00 A.M and i struggle to wake up before that..so just to put myself to test, i enrolled onto the Morning Batch, from 6:00 AM to 9:00 PM...I knew it was quite a challenge for me to even do it...

When i told my folks that i wanted to go for this course, they were supportive but when i said it starts from 6, esp. my dad said, "Son, you just flushed Rs.1000 down the commode, cos u will never ever be able to make it" My confidence and dream of turning around my life took a unhealthy beating !

So instead of dwelling in negative thoughts i told myself, i will take one day at a time and also told myself that i m not out there to prove anyone wrong, the whole step is only for my own good...

Then Arrived evening of Sunday, May 4th, when i forced myself to sleep by 11(thats by all means, early evening for me) but did it cos i had to wake up at 5.30 ! On the first day, crawled out of bed, thanks to dad, who said he d only help me wake up the first day ! "Good Morning Irfan" i told myself as i stepped outside the house !

The First day was disappointing cos the Art Of Living(AOL) instructor proclaimed that you could change your whole life just by breathing ! I told myself, this is crap ! Cos i don't need anyone to tell me how to breathe, i have been doing it pretty well, ever since i was pulled out of my mother's womb.Nevertheless, thought i d give it a Second chance, and told myself not to lose steam. In the meantime, i shredded off people from my life, who constantly hurt me and called it ignorance...i asked then to "Get-Out-Of-My Life"...pretty difficult, but dunno how i managed to do it.

Second Day is when the Craziest Ride of my life started...i was up and awake at 5.30 and the best part is i didn't need anyone to wake me up.was a lil surprised, but shot down my astonishment by saying, i must be excited..This was when the truth was revealed to me...The Sudarshan Kriya.I will not talk about it here as you will have to attend the course to experience it, but this technique alone can transform your life..

The next 4 Days were a breeze, i woke up effortlessly at 5.30, even without the alarm..i actually would open my eyes at 5 and feel i m late for the course..and So my routine was go in for the course at 5.45, come back home at 9.15, munch up some breakfast and head to work, comeback from work at 9.30, finish up dinner and crash by 11.30..

Today marked the end of my course, and i m so happy, elated, excited,kicked about life, that i wanted to share my joy with everyone..This course has helped me

• Relieve Stress : Now i don't get worked up with small things
• Breathe properly and feel Energetic : I so damn needed it
• Wake up early : Now i have more hours in the day and i can do so much more
• Sleep : I suffered from Sleep Apnea for the last 5 years and believe it or not, 1 week of AOL and i have experienced Quality Sleep
• Learn t How to forgive and Move on : People who hurt you, don't do it on intention. Also, understood that you should let yourself be the football of someone's opinions..

I have already made up my mind to take my association with AOL to the next level by enrolling for Sri Sri Yoga and Intermediate level of AOL...

I will keep you updated of more explorations and discoveries i d come across.

If you have any questions about art-of-living, then please do ask me and i will ensure that they are all answered(in consultation with my instructors)

Sri Sri Ravishankar, a message for you, "You converted this Atheist into a Spiritual being, by teaching him How to Breathe" Thanks again !

Note : Art Of Living isn't a Religious Outfit but oen of the world's largest volunteer-based organizations, an endeavor towards Peace thru basic human values. It has touched more than 300 million people spanning over 140 countries.

Importance of Knowledge Management and Outsourcing

Corporate power houses are always associated with changing their mantras to stay abreast with the times. Old timers will tell you of how the funda's moved from Efficient Work allocation techniques to Open Door policies to Six Sigma madness. The focus has primarily oscillated between processes and resources(inclusive of systems). Well, now the spotlight is on a different segment, which is the mixture of Processes and resources, Knowledge management. Though the initiatives may be implicit and not necessarily be known as Knowledge Management in all organizations, it is present in some form or the other.

The reason for the wild oscillation of focus on to KM is basically due to the business and revenue models, which are undergoing a radical change. Concepts unheard of 10 years back are now ruling the roost, like those of outsourcing. There are perils with every business model but the minimal impact on the organizations operations are considered beneficial. Organizations are increasingly focusing on working with the set of activities, which happen to be their core competency, and are outsourcing the rest to other organizations that may or may not be within the boundaries of their own country. However, Outsourcing could help cut costs by a Herculean 85-90% but it surely does open up the Pandora's box of problems.

Problem's like remote operations, knowledge sharing, cultural differences and in-effective communication across levels. Also, the advent of Cost Sensible Outsourcing industry has opened up a busy market for skilled labour, which in turn provides people with more choice, more flexibility. This has led to disappearing loyalty towards employer, poaching of efficient employees and the beginning of a rat-race to make more money as fast as one could, in a nut shell, the phenomenon is called Iteration.

In a time when the iteration rates of organisations are crossing 30% year on year, sending the HR departments into a frenzy re-recruitment drive, there is a prima facia need to ensure that knowledge from experience is trapped within the organization despite the high tides in iteration.

Now, putting a quick scan over the Opportunities and Challenges that Knowledge Management in a BPO Industry springs up. The opening of new markets in South and Southeast Asia has seen the advent of new businesses in the areas of global sourcing of products and services. India has been the germination ground for the Business Process Outsourcing (BPO) business and many global organizations have tapped the country’s ample human capital to effectively outsource critical business functions. The variety of processes within each one of the functional domains has triggered of increased interest in capturing best practices, processes and learning from each project that is outsourced. This is aimed at saving time, money and effort while training and setting up similar processes or ramping up an existing process / project. This has led to an increased interest in the Knowledge Management (KM) discipline, which deals with enhancing existing knowledge, capturing tacit elements and preserving knowledge assets for use in the future. It also promotes an organizational culture of sharing processes and learning within the organization.

Trends and surveys indicate that all organizations have begun to realize the importance of KM. However, most of them face the challenge in collating and assimilating all information and experiences, which may, in the case of some organizations, be spread across geographical boundaries. Even if knowledge is captured, getting people to contribute and utilize stored knowledge assets is a challenge. With these come further challenges, which are precipitated either because people are not aware of the involved technology or are not aware of the benefits of such an exercise. However, if these challenges are taken care of a lot of benefits emerge for organizations as a whole.

A robust KM system leads to development of service intensity, better quality of work and culture, globalization and uniformity of processes across the organization and removal of redundant processes. This in turn leads to faster services, employee retention, valuable knowledge asset creation, innovation and idea generation, reduced costs, and effective delivery of organizational goals to employees.

Intellectual capital and the effective use of it will be the trigger for gaining competitive advantage in the rapidly growing global economy. The success of organizations will depend on their ability to attract and retain their best workers. This will be made possible if they have effective performance management systems to enable continuous learning and motivate the employees. The firms would need to encourage knowledge sharing as part of the organization culture, i.e. organizations would need to view KM as an implicit part of daily work and create an environment where knowledge sharing is encouraged. This stands true in the new businesses that organizations are getting into globally. Prime among these business domains are the Business Process Outsourcing (BPO) business and lately the Knowledge Process Outsourcing (KPO) business.

Each process in the BPO industry involves work on a specific functional area, viz. HR, Finance – insurance, collections, payments etc. Each of the business functions or processes which are outsourced to third parties require the use of human capital which has some specialized knowledge and / or experience of working in that particular function. These people would then be qualified to be called knowledge workers for that particular function. For example, a process involving loans and mortgages would require employing personnel who are well acquainted with the concepts or those who have an idea about the concepts and will require extensive training on them. To build a robust process in this area, the organization will therefore be required to leverage the intellectual capital, which is recruited to increase revenue and reduce costs and to justify the business case. To enable this, it will be required to channelize collective learning, capture learning assets, share knowledge while working, innovate on set up processes, integrate appropriate technology and optimize workflow. The process will be successful when the organization is able to leverage, capture, and store what their learning is and share it in consequent phases with a new set of employees without much time and effort in its growth phase.

Therefore, organizations would need to develop a methodology by which they can optimally tap their intangible human assets, explore knowledge which is captive in the mind and in the variety of experiences that can be utilized in the future even if its existing set of personnel float across to other players in the industry. From a BPO perspective, KM also involves harvesting new knowledge for gaining competitive advantage, enabling access to a vast amount of project and process information and sharing best practices evolved in the course of working those processes. Further, it also involves applying management strategies and technology that support all the mentioned functions including groupware and intranets. Having said that, it would be quite a challenge to make KM implementation happen in a diverse work environment, which is a characteristic of the BPO industry.

Creating a "Knowledge – friendly" work culture is difficult if it is not in the genes of the culture because it involves selling an elaborate plan for change management to the organizations’ leadership. Likewise, a few of the other challenges that are faced by organizations can be enumerated as under:

1. Absence of knowledge systems that can capture tacit elements of knowledge from existing set of employees
2. Absence of a continuous learning i.e. a learning organizational culture
3. Lack of sharing of best practices across various departments, and upgradation of best practices with change in processes.
4. Lack of openness and inadequate dissemination of information between different stakeholders in the knowledge capture and storage process.
5. Employee reluctance to share information amongst themselves
6. Lack of avenues for searching knowledge sources and lack of mechanisms for constituting communities of practice.
7. Lack of motivation in the employees to accept and incorporate industry best practices into their operations
8. Loss of knowledge when people move across departments/Organisations as part of changes in job roles.
9. Lack of understanding of the company’s business goals, models , and strategies
10. Lack of understanding of metric measures and the Knowledge Management program

In the context of these challenges, there are many opportunities that Knowledge Organizations have, over other organizations. A few can be enumerated as follows:

1. Provision of the right knowledge at the right time for any user that wants it
2. A repository of all knowledge items where all knowledge assets can be collected and stored.
3. Effortless handling of routine and simple tasks simply by sharing best practices
4. Increased innovation and spread of ideas in process
5. Complex and unexpected tasks will be handled competently making effective use of past experiences in the same kind of tasks
6. Costs of training and building learning assets are lowered after the knowledge repository is in place.
7. Employee retention is enhanced as employees are recognized for their contribution to repositories and recognized in the performance management process
8. Operations get further streamlined by sharing of best practices and redundant processes can be done away with.

In summary, KM is intrinsic to the expectancy period of BPO/KPO's in India. The organizations have proved themselves by cutting costs, but time is now, to take the value addition to a level higher with KM. However, it still remains to be seen how much longer this concept sustains itself, before yet another mantra takes the world by storm.

Advertiser's are you listening ??!!

I visited my blog today and realised that there has been only one blog entry for the month of february...well thats pretty amusing cos Feb has been the month of sorts for me and i havent managed to convert them into written literature..Never mind that....i m now back in flow...

Surprisingly..i got a couple of mails asking me why i was not updating the blog...well "surprising" cos i never thought anyone(other than me!!) actually read my blog :))

One of these days, while i was idling time at home, mom comes up with this BRILLIANT Pestering idea of me getting someone to get the exteriors of the house painted...seem like of late she has developed this unassuming grudge of having me in the house doing nothing, finishing off the ration at home and not getting paying in any form for it...but guess...mom's do assume that role at some point in our life's...

well...about the painting job...ignored it for the first 1 week...then mom made it torturous to ignore it thereafter...So i finally set out on the hunt to find a Painter in my neighborhood..you wont believe it...after having searched for 2 days...couldn't manage to get hold of a Single painter, who was free to do the job...all were booked for the next 2 weeks...its the same Kinna feeling you go through, when u go to PVR or INOX on a weekend and find that all tickets are booked for the weekend and the next available ticket is for Monday...who needs Monday anyways...right??

So i came up with this brilliant idea...why not have advertisers put up their banners on my house's exterior walls? this way, there will be absolute no need to paint them and i will earn some money in this process as well..i would like to have the Axe Ad with all those scantily clad women covering my walls...no one would actually miss my house then :))

Just imagine, if this concept were to catch on...Asian Paints and Nerolac will shut shop and every house will become more and more interesting to look at, and of course my nemesis, The Painters, would be out of jobs, what fun !..

Think about it, When u d b hunting frantically for a friends house on a particular street, it wud become lot more simpler...all he'd have to say is "the House with the LUX Ad on it"...

This concept would have a High remembrance value and no one could simply ignore..unlike how they skip coming in the print media and television..

Ad Companies are you after-all listening? This is Irfan "Ogilvy" Ali Talking !! :))

Self-Victimised by the Credit Mania and Derivation of Pseudo Happiness

When i took my baby steps into the corporate world, everything seemed rosy ! I had a pay package which was 2 Digits + Pocket Money Figures ! if i were to be more mathematically-Correct : My Salary was square times my pocket money ! Boy, that was a time, i saw the whole world unfold in front of my squint eyes ! (No No i m not squint physical-appearance per se, but were squinted with the Bright Sun which came along with the revelation of the unfolding of the whole New BIG world !)

This part of my story is called The AWAKENING !

Then with the money came the aspirations of doing a lot of things, which i only dreamed of my in college years ! Shopping, Dating a lot of Women(Paying for once) & Of course, Partying in the creme de la creme spots ! Damn i could afford it now !

I took my women to the best places & brought the most thought-off gifts ! Wore the best of brands(i still do & but not in degree of the above stated magnanimity).In a nut-shell, ATE-DRANK& MADE MERRY !

This part of my story is called Psuedo Happiness !

It was rosy for the first few months, where i could make ends meet and then i was smitten by a Bug called Credit Cards(which has bitten many of us, i mean most of us)...In efforts to take my Psuedo lifestyle to the next level, i bought in the crap that the Credit Card Salesmen said, Life-Time Free Card, 45 Days Credit Period, Accident Insurance blah blah blah blah....Well, i thought(thought : is the word to note here) i had struck the chord between Financial Independence & Personal Bliss...

But then they came like Bangalore Monsoon Showers, the Credit card Statements ! Week on Week!!! It was so bad, that i dreaded getting back home ! Cos i would see a stack of them, neatly arranged on my table ! i tore all of them, but didnt have the audacity to cut my 3 Credit Cards...they were all overflowing with thier SAID LIMITS. My So-called Bomb of a salary was paid towards paying off interests of these cards, not even the Principal !

This part of my story is called Ignorance is Bliss !

Just in my Sophmore year at Work, thanks to the insightful talk from my fren, Zaid, i finally decided to cut them all (read : with a Heavy Heart). The day i cut them, i had like withdrawal symptoms, which was quite wierd...i didnt know this Credit thing had become a Habit, something like a contraband addiction!

But seriously, i was going thru this Self-Inflicted crap & Friends & Women were out like pub-hoppers walk out of a pub after 11:30....they moved out in Herds !!

Honestly speaking, realised who my true frenz were !!! At various junctures of life, world creates some circumstances that put YOU and PEOPLE around you to a COLD WATER TEST ! There are 3 possibilities to this :

• You & your close ones stay together in the cold water taking the warmthfrom each other to survive
• Close ones touch the cold water with thier toes and just walk back,stating they might catch a Cold
• The Smarter ones, see you way ahead , getting into this Water and theychange thier path completely
  

The ones that form the part of the 1st possibility are the ones who really measure up for your respect.

This part of my story is called Withdrawal symptoms of Credit living.

In this case, i surely have to mention my Ex-Girlfren's help(only one in this case) ! She was quite a Solid Support ! She never ever made me feel that i was Broke and miserable, she always made me look at the brighter side, that i had finally cut my cards ! Damn, i miss her and her optimism!

But like many things in life, people come make a Huge +ve Impact on your life and then walk in thier respective directions ! and its always important that we dont cry over the Empty space created by them in our lives, but the positivities of thier companionships they left !

We, Humans, very often cry about something we lost but how many times have we looked and take count of what we learnt/gained from it !

Well, i learnt my lessons and been off Credit for the last 3 Years now...now i feel lot more Financially stable and yes, when i dont have the money to spend, i stay at HOME ! Its a nice place u know ! :)

The moral of the story is you always learn from your mistakes, but do make it a important part of your life to learn from other's mistakes...

Last piece of advice : Dont go with flow of "Chill-dude-Life-is-to-be-lived-for-the-moment"

Cheers and Let buddha be with you !

Quarter-life Crisis

Being a twenty-something

It is when you stop going along with the crowd and start realizing that there are many things about yourself that you didn’t know and may not like. You start feeling insecure and wonder where you will be in a year or two, but then get scared because you barely know where you are now.

You start realizing that people are selfish and that, maybe, those friends that you thought you were so close to aren’t exactly the greatest people you have ever met, and the people you have lost touch with are some of the most important ones. What you don’t recognize is that they are realizing that too, and aren’t really cold, catty, mean or insincere, but that they are as confused as you.

You look at what you are studying or your job… and it is not even close to what you thought you would be doing, or maybe you are looking for a job and realizing that you are going to have to start at the bottom and that scares you.

Your opinions have gotten stronger. You see what others are doing and find yourself judging more than usual because suddenly you realize that you have certain boundaries in your life and are constantly adding things to your list of what is acceptable and what isn’t. One minute, you are insecure and then the next, secure.

You laugh and cry with the greatest force of your life. You feel alone and scared and confused. Suddenly, change is the enemy and you try and cling on to the past with dear life, but soon realize that the past is drifting further and further away, and there is nothing to do but stay where you are or move forward.

You get your heart broken and wonder how someone you loved could do such damage to you. Or you lie in bed and wonder why you can’t meet anyone decent enough that you want to get to know better. Or maybe you love someone! but love someone else too and cannot figure out why you’re doing this because you know that you aren’t a bad person. Getting wasted and acting like an idiot starts to look pathetic. You go through the same emotions and questions over and over, and talk with your friends about the same topics because you cannot seem to make a decision. You worry about loans, money, the future and making a life for yourself…

And while winning the race would be great, right now you are scared just to be a contender!
What you may not realize is that every one reading this relates to it.

We are in our best of times and our worst of times, trying as hard as we can to figure this whole thing out. Tell everyone about this blog… maybe it will help someone feel like they aren’t alone in their state of confusion…

Its called “Quarter-life Crisis.” nothing is constant……except change.

What’s life without a few risks? Keep playing the game!