Wednesday, 2 October 2013

This Aint Nothing

"This Aint Nothing" goes the great country and western song of a few years back.  I was thinking about that song as the deadline passed for Congress to reach a budget deal.  What happens 15 years from now?  No vote can save us then.  Medicare will be out of money and social security will be bleeding as well.  Then what?  That's the real budget crisis.

In a country choking on unaffordable entitlements, the Obama Adminstration has crammed down one more unfunded entitlement on a wary public.  This simply makes the clock tick faster toward America's impending insolvency.

The US is on track to go broke.  Whatever happens now is irrelevant unless it tackles the entitlements.  Putting this off, even for a year or two, makes it almost impossible to fix and guarantees the country's eventual insolvency.

So, why not fight now?  Shut down the government.  That's better than business as usual, which simply guarantees an eventual shutdown that no Congressional vote can then alter.

If the Republicans cave, then they deserve to be defeated in 2014.

Monday, 30 September 2013

Career Lessons from Breaking Bad

AMC's Breaking Bad ended with a bang last Sunday, leaving viewers generally content and definitely shell shocked. Though the ride is over, we can finally look back at the series and reflect on how we can learn from both Heisenberg's victories and mistakes. How can a meth kingpin help you and your future careers? Here are some takeaways :


1. Be hard to replace : Find a specific skill set and make sure you are good enough that nobody can quickly take your place. Whether it be modeling, analysis, writing, communication, or even a certain product with a 99.1% purity, having a specific niche or strength can ensure job security. Just try not to kill fellow associates to eliminate competition.

2. Associate with the right people : If you are the smartest person in the room, you're in the wrong room. Surround yourself with people who you believe can bring out the best in you. Doing business with a high school dropout and drug addict will certainly lead to complications in the future, as Walt found out. Gus, on the other hand, was very strict on who he dealt business with. Only those who met his criteria and who had a low risk profile were considered. The moment he made an exception ultimately led to his downfall.

3. Be genuine : Walt has been manipulating Jesse for the entirety of the show. From poisoning Brock to letting his girlfriend die, he repeatedly lies to him. Had Walt just tried to be honest, Jesse would not have gone to the DEA, Hank would still be alive, and many of this season's shockers would probably not have happened, perhaps to the dismay of the audience. In order to foster relationships in the future, being genuine and caring for the interests of others will go a long way.

4. Always be the one who knocks

- Jesse Chai

Sunday, 29 September 2013

Candy Crush Goes Public!



We all have a love-hate relationship with the Candy Crush Saga. It's addicting to play yet equally frustrating when that one last bubble can't be popped. Well, the publisher of this game, King, has filed confidentially for an IPO. Based in London, King is following Twitter's footsteps in the IPO process. Although they filed confidentially, they announced the IPO soon before the investor roadshow begins.

Some worried skeptics predict that King could face the same fate as Zynga. Zynga started with relatively normal valuations at about $11/share. But after struggling with generating revenue and a lack of consumer demand for their games, Zynga fell off the radar. Now they're sitting at 3.78, well below their IPO price.

So what makes King a better investment? Well let's focus on Candy Crush. On my Android phone alone, I see that Candy Crush has over 100 million downloads. Let's double that for all the IPhone users out there. Then let's add a few million for the people who actually play on Facebook and not their phone. So with over 200 million users playing this game, it seems like a pretty sweet time for King to go public.

Another reason why King has an advantage over Zynga is because of the nature of its game. Candy Crush is designed to be psychologically addictive. For example, when the game starts, the first 50 levels are very simple for most players. This gives people overconfidence in their skill, and they believe that they personally are highly competitive players. They think they are highly competitive because everything they do on Candy Crush is linked to their Facebook account. On the game itself, they can see what level all of their friends currently are on. The whole game is a race to end. Finally, the game only allows you 5 lives before having to wait a certain amount of time to get more lives. This simulates a withdrawal effect in people, and consequentially they become more and more addicted.

The scientific nature of this game contrasts sharply with Zynga's games. Zynga allowed us to interact with our friends in games like Words with Friends, but we never felt superior over others nor did we feel powerless over when we could play the game. Also, Zynga's games had many more competitors than King's games. Many individuals have made their own versions of Scrabble and Poker that perhaps exceeded Zynga's version. With Candy Crush, however, no one has been able to remake this type of game.

Finally, Candy Crush has a high potential to generate cash. Already, estimates are out that King generates more than $600,000 everyday through Candy Crush alone. In a single year, that's over 210 million.

Now the catch. Is Candy Crush a fad? We can draw a comparison between Candy Crush and Farmville. Farmville had over 80 million users at one point, but in half a year, it dropped down to 20 million. Now, it's next to nothing. The psychologists who broke down the addictive factor in Candy Crush have predicted that in a few months of playing, people's interest in the game wears off. As the levels get tougher and the game depends more on "luck" than "skill," it's tougher to keep people engaged. I personally think that once the next big social game comes out, Candy Crush will be forgotten faster than Farmville. The game has another year at most to run. Hopefully, King has a backup game in mind to seduce its former Candy Crushers. If so, this seems like a great investment.

-Kunal Agrawal

Saturday, 28 September 2013

Ireland's Economic Comeback




On Wednesday, the International Monetary Fund (IMF) released a billion dollars of financial help to Ireland, as the country complied with the requirements set up in its 2010 bailout plan. The plan, which saved Ireland from bankruptcy after it suffered a massive banking crisis starting 2008, is reaching its end, as Ireland is getting ready to start issuing sovereign debt again in December. However, the country has to reach a minimum annual growth of 2% for its debt to become sustainable.

Ireland is now out of its second recession in five years with a 0.4% second quarter expansion. This positive data, however, falls short of the optimistic 1.3% growth over the entire year predicted by the Irish government. Irish exports have grown by 4.3% over the same period, while household consumption grew by 0.7%.

The IMF decision came almost one week after other good news for Ireland: on Friday, September 20, Moody's announced positive forecasts on Ireland's sovereign debt, which it now judges as "stable" instead of "negative", and now considers that the country's debt-ratio should become sustainable again. These forecasts, however, highly depend on Ireland's ability to maintain its austere economic policies and exportation rates. Before this announcement was made, Moody's was the only rating agency left to consider Ireland's debt as a speculative and unstable investment, as S&P and Fitch had positive and stable perspectives on Ireland's ratings. The change in the agencies' opinions seems to indicate that Ireland is now considered as financially sound, which should greatly impact the rate at which it will issue its new December bonds.


Ireland is reaching the end of its bailout program and seems to have found the path to economic stability. As such, it is a concrete example of what could happen to other bailed out European countries like Greece and Cyprus in the future. Moreover, this new Irish growth will have a positive impact on its partner economies in the European Union, which could in turn help other bailed-out countries.


- Mickael R'bibo

Friday, 27 September 2013

Telangana: To be or not to be?


Telangana supporters gather to advocate for the region's statehood.

The concept of statehood has always been a contentious debate in India. It’s recently gotten international press as Telangana, a region of Andhra Pradesh, is fighting a stormy battle for statehood.

When India gained independence from the British in 1947, the modern-day Indian map began to emerge. States were created and borders were drawn. The map continued to take shape in 1956 with the States Reorganization Act, a piece of legislation resulting in the single largest change in state borders since India’s independence. The act called for state boundaries based on linguistic differences.  So, Karnataka was created for Kannada speakers, Kerala was created for Malayalam speakers, Gujarat for Gujarati speakers, and so on. Modern day Andhra Pradesh was created for Telugu speakers. 

It seems despite their linguistic alignment with the other regions of Andhra Pradesh, the people of Telangana were unhappy from the start. Movements for their secession have been arising for decades, with major uprisings occurring in 1969, 1972 and 2009. Over the past few months the Telangana movement has gained new momentum, and despite strong opposition from Andhra Pradesh, it seems now that it will indeed become a state.
Telangana protests over the last few months have clashed with police.

Telangana is the largest of Andhra Pradesh’s three regions, covering 40% of its total area, holding 40% of its population, and making 76% of its revenues. The state capital, Hyderabad, lies at its core. Hyderabad is one of India’s most important cities from an economic standpoint.  As the statehood plan stands now, Hyderabad will serve as the capital of both Andhra Pradesh and Telangana for the next ten years.

If Telangana does become a state, it will be the first state in India created due to dissatisfaction with the political community. The people of Telangana feel they have been suffering from political neglect in the state and in the nation.  They feel their representation in the national government over the last 50 years has been unfair, as most of the state’s chief ministers (equivalent to a state governor in the US) have come from other regions. Chief ministers from Telangana have served for 10.5 years, while chief ministers from the rest of Andhra Pradesh have served for more than 40 years. As a result the people of the region feel ignored and exploited by the national government. They feel they are on the state’s peripheral agenda, leaving Telangana a backward region. Some of the injustices they decry include poor water distribution, budget allocations, and government job allotments.  Water distribution in particular, is a major concern for the people of Telangana. Not only have there been issues with receiving a reliable supply of clean drinking water, but also there have been issues with receiving water for irrigation. A dependable irrigation system is crucial to the livelihood of the Telangana people, as agriculture is one of the region’s main sources of revenue. Also, due to a recently constructed dam, some mineral rich sections of Telangana are not receiving an adequate water supply to sustain their mining communities. The dam has redirected the river’s water to other regions of the state, away from Telangana. In addition to the water injustices, the Telangana people feel that despite the revenues they contribute to the state, they are not seeing sufficient returns in terms of government development projects and government jobs.

Critics have called the recent national attention to the issue nothing more than a “short-term electoral maneuver.” The Indian national elections will take place in May of 2014, and as candidates are being selected it is no secret that they are seeking votes in the region. Congress, the current leading national party, says Telangana will be created before the next election.

The fight for the state of Telangana brings to light many issues. If the federal government grants Telangana statehood this may lead to other marginalized communities vying for statehood too. The people who live along the slender neck of West Bengal, in the region of Darjeeling, have been struggling for a state called Gorkhaland for decades. Like the people of Telangana, these people too feel ignored by their state’s government.  Will they too receive the status of statehood? Why Telangana instead of Gorkhaland? This will become a particularly controversial issue, when the national election passes and the typical insouciance of the national government returns. Other issues will arise beyond the dissatisfaction of other marginalized Indian communities. How will Telangana continue to share its state capital with Andhra Pradesh? What happens when their ten-year agreement expires? What are the other repercussions in store for Andhra Pradesh after the split is made? Is Telangana prepared for the administrative responsibilities that are required to run a state? Many questions still need to be answered on both India’s and Telangana’s preparedness for the new state. It is not something to be rushed, simply to meet the deadline set by the national election.


Written by: Lynn Bernabei

Beats Takes the Next Big Step


Top private equity firm, Carlyle Group, gave Beats Electronics $500 million Friday valuing the company at $1 billion. In exchange for growth capital, it will be taking two of six positions on the high end sounds and audio tech company's board.

The money will be used to buy back HTC's final twenty five percent stake in the company, ending a partnership that did not go quite as planned. The Taiwanese smart phone company bought half of Beats three years ago for $309 million dollars, and used the technology in its smart phones. As its cell phone sales have since far lagged behind Samsung, it has moved to sell its holdings in its partner, in order to focus on its most important business segment.


Beats has started to expand into the speaker business, revealing a new line of pill speakers marketed in notable pop songs "Blurred Lines" by Robin Thicke and "We Can't Stop" by Miley Cyrus. It has already captured sixty four percent of the premium headphone market, and has put its technology into Hewlett-Packard's computers. On track to made $1.2 billion in revenue this year, the infusion of capital will allow the company to take the next step in separating itself from its competitors.


Beats is banking on the continued growth of social media use and the smart phone industry. As it looks to become the innovative leader of audio accessories, it believes that the growth in tablet and digital audio use will allow its own growth to continue.


The Caryle Group's investment shows the trust it has in the financial strength, brand, and growth prospects of Beats Electronics. The next wave of Beats premium headphones should hit the market with a splash.


Rishi Chheda

"You Can Keep Your Existing Health Insurance"

I wondered about this statement at the time Obama made it.  Clearly, by changing all the rules of health care insurance and mandating conformity, it was unlikely that the vast majority of Americans would not find themselves forced by 'The Affordable Care Act' to have to deal with a completely different health insurance plan and completely different set of health care providers.

I now understand what Obama meant.   He was speaking to his immediate family and (politician) friends.  They are exempt from the "Affordable Care Act."  Clearly what he meant to say was: "if you are exempt from Obamacare, like me and my family, you can keep your existing health insurance."  He never meant to mislead.