Food Security

I wish I was an agriculturalist , could have then done something to address the world food problem. The world population recently crossed 7 billion, I wonder how much mother earth can take the load of its hungry billions. I salute the scientist who are working tirelessly in this area, the need of the hour is to increase the yield on our farm lands, produce disease resistant crops and the ability to deal with vagaries of weather- drought, flood etc. I read this report from Bill Gates which covers some of the food security issues. The report talks about Swarna-Sub1 rice being planted in India and Bangladesh which scientists have recently developed with an extra yield to feed some 30 million people. This variety is resistant to flooding, which is a constant threat to Eastern India and Bangladesh. Bill Gates further writes in this report that "Just like humans, plants get attacked by viruses, bacteria, and fungi", in that sense all the advancement we have made to protect human beings from these dangerous micro organisms can be leveraged towards plants as well. What we need is innovation to kick in this area, a private public partnership and people like Bill Gates who act as a change agent.

On a recent flight to Shanghai I read a nice article on how China has become self sufficient in grain production thanks to high yielding rice variety, and it has also made noticeable progress in green house farming. It means that the summer vegetables are no longer confined to summer months, the same can be enjoyed year round. The abundance in vegetable has led to lower prices and food for millions. Here's a nice article on China's green house revolution. Here's another article on how the Chinese are managing fighting plant diseases , they have this unique concept of helping farmers remotely using modern telecommunication devices. Here's an article from Guardian on what is being done in some parts of the world...I didn't particularly like the insect eating part..oh I will puke! I am a vegetarian to begin with!

In India scientists recently gathered to talk about the research in GM ( Genetically Modified) rice, and they have demanded more funds for research, I would whole heartedly support them! In the news paper on that plane I also read about this great agricultural scientist from China- one of the unsung heroes- the father of hybrid rice- he is 81 now, but still working at full speed, his name is Yuan Longping.

Here's hoping that we the people are able to find a solution to global food problem before it is too late ( we already have one billion hungry people on this earth), I would encourage the young generation to think about these issues and pursue these studies to make world a better place. I would like to end this blog with a link to an article called - World in 2100 : Ten Billion People, No Oil and Not Enough Food. I am an optimist I hope the above predictions don't come true, that the global warming threat is mitigated and we have food for everyone!

The Road Not taken

Happy New Year dear visitor! May the new year bring lots of happiness in your life. Below I produce my favorite poem from Robert Frost, The Road not Taken!

The Road Not Taken
 --Robert Frost
  TWO roads diverged in a yellow wood,
 And sorry I could not travel both 
And be one traveler, long I stood 
And looked down one as far as I could 
To where it bent in the undergrowth;


 Then took the other, as just as fair,
 And having perhaps the better claim, 
Because it was grassy and wanted wear; 
Though as for that the passing there 
Had worn them really about the same, 


 And both that morning equally lay
 In leaves no step had trodden black. 
Oh, I kept the first for another day!
 Yet knowing how way leads on to way,
 I doubted if I should ever come back.


 I shall be telling this with a sigh 
Somewhere ages and ages hence: 
Two roads diverged in a wood, and I— 
I took the one less traveled by, 
And that has made all the difference.

Sunshine

May the sun bring you new energy by day,
May the moon softly restore you by night,
May the rain wash away your worries
And the breeze blow new strength into your being,
And all the days of your life may you walk
Gently through the world and know its beauty

--- Apache Blessing

Nature has this unique gift- it helps us rejuvenate, re-energize and bring balance in life. The picture attached is one I took at the UBC Botanical , Garden- it has a good collection of lush green trees and plants. I found myself lost in the nature, the tress, some of them 700-800 years old... they must have seen the good , the bad , the ugly ( forest fire, storms) in their life and they are still standing tall-suddenly my problems in life start looking too small :-)

Serendipity, creative thinking, friendship!

Do you believe in serendipity? I do. Many important inventions and discoveries may never have happened if it was not for chance events. Insulin, Penicillin, X-rays, Allergens were all accidentally discovered. Here is an article which lists some of these. An open mind is needed to capitalize on these chance events- as the American physicist Joseph Henry once noted, "The seeds of great discoveries are constantly floating around us, but they only take root in minds well prepared to receive them."

Here is a blog post on CNN that talks about randomness. New ideas require some down time, some coming off the grind- many researchers see creative thinking as a four-step process: preparation, incubation, illumination and verification or revision.”Incubation is “the ‘mystical’ step,” one in which both the conscious mind and the subconscious mull over the problem in hard-to-define ways.” Hard to define, yes, but not hard to foster, as long as chunks of the day or the week are left open for relatively random activity: long walks, surfing the Internet, browsing a bookstore, household chores that don’t require too much thought, watching the birds at the birdfeeder and gazing out at the ocean."

Here is another great reference to serendipity discoveries , a blog post on Harvard Business Review- apparently the Post it Note, Viagra, Nylon, Aspirin, tech behind Ink Jet printers were all chance events!

The lesson- don't restrict yourself to the tried and tested- go explore the world, venture out little bit, take risks...the possibilities are immense! Something somewhere is waiting to be discovered, that distant person you never thought you could be friends with, may turn out to be the best thing that ever happened to you, go ahead extend that hand of friendship! Most of my friends today are a result of serendipity, and hence I am a firm believer :-)

Infectious diseases - microorganisms

Last weekend I worked in my garden now that spring is here. Of course nothing unusual about that, but what was unusual was that I picked mild temperature (99) and some body-ache the next day. This being the Easter weekend, thankfully I had plenty of time to sleep all day off, again very unusual for me to sleep during the day like that. I ended up seeing the doctor and getting some antibiotics...can't really afford staying away from work for very long!

This little tryst with a microorganism (bacteria) got me thinking, one day of sickness and I already feel behind on some of my pending tasks, how about millions others who die every year because of bacterial infections. Despite it being such a big killer and more so of infants (0 to 5 years), people know very little about this dreaded microorganism. So this week I did some research and tried to understand all the microorganisms which threaten humans- bacteria, virus, fungus, parasites and protozoa. I read about the progress we have made in the last 200 years and the challenges which still lie ahead. The developing countries are worse off, per one stat 50% child mortality could be avoided just by proper vaccination, the defense is there but people are too poor to be able to afford it.

I chose engineering line as my career, but sometime I think the work in medicine may have been more fulfilling. There are still many things unknown in this world. The bacterias mutate, the virus mutates, and the medicine which worked earlier is no longer effective. No doubt we have made important progress, like we have mapped some key bacterial gnomes, we have vaccination, we have antibiotics but the task is still far from over. It takes too long to come up with a vaccination once new strains of virus or bacteria are identified. We could definitely do better. Now I can't be a doctor , too late for me, but I am going to try my best to do my part in disseminating the available information.

I will work on spreading awareness about these dangerous microorganisms and the precautions we can take to avoid their wrath. In the medical community it is said that Prevention is better than Prescription or Procedure(surgery). Till such time we map the gnome of these deadly microorganisms completely and have an antidote, let us make all out effort to steer clear of them- prevent it from happening in the first place. Here are some of the suggestions I have read- wash your hand, use hand hand sanitizer, cover your mouth when you sneeze or cough, eat antioxidants, get good sleep, exercise, eat healthy diet, stay up to date on vaccinations, take annual flu shot etc. You can read some more from this link courtesy WebMd.

Here's hoping you a very healthy life , let us take care of ourselves and enjoy the little pleasures of life! You have so many more milestones left in life, some small some big- like enjoying the morning sun on a beach, watching your near and dear ones grow, run a marathon...go get your vaccination, stick around :-)

America's 10 most popular drugs

Came across this article at Times, it has stats on the 10 most popular drugs in America. The numbers confirmed what I mostly knew already, the usual culprits are all there- the blood pressure related, the cholesterol related, the sugar related, the chronic pain related and of course the antibiotics. Using the stats around prescription drug usage, one can find the common diseases and hence take action to avoid them. Here's wishing you a healthy life for years to come and may these drugs never be part of your life :-)

10. Hydrochlorothiazide (HydroDIURIL)
Type of drug: diuretic (water pill)
Used to treat: high blood pressure
Number of prescriptions in 2010: 47.8 million
Number of prescriptions in 2009: 47.9 million

The tenth most popular drug treats high blood pressure, one of the major risk factors for heart disease and stroke. About 1 in 3 American adults currently have high blood pressure, which is more common among older adults, the overweight or obese, people with a family history, smokers, people who don't exercise and African Americans.

9. Metformin HCL (Glucophage)
Type of drug: anti-diabetic
Used to treat: diabetes
Number of prescriptions in 2010: 48.3 million
Number of prescriptions in 2009: 44.3 million


Type 2 diabetes, the kind linked with obesity, affects 25.8 million Americans, or about 8% of the total population, and an estimated 7 million people are undiagnosed. What's more, 79 million people are estimated to have a condition called pre-diabetes, in which patients have impaired glucose tolerance and are at high risk for developing diabetes. In 2010, 1.9 million new cases of diabetes were diagnosed in people aged 20 years and older, according to the American Diabetes Association. Metformin is commonly used to control blood sugar in diabetes patients.

Also came across this blog which has a lot of information about this dangerous disease.

8. Amoxicillin (Amoxil)
Type of drug: antibiotic
Used to treat: bacterial infections
Number of prescriptions in 2010: 52.3 million
Number of prescriptions in 2009: 52.4 million

Antibiotics can be used to treat infections of the nose, throat, skin and urinary tract — but they cannot cure colds or flu, which are caused by viruses. Nonetheless, millions of prescriptions are written to try to treat these illnesses — improper use that is contributing to the increasing problem of antibiotic resistance.

7. Azithromycin (Zithromax)
Type of drug: antibiotic
Used to treat: bacterial infections
Number of prescriptions in 2010: 52.6 million
Number of prescriptions in 2009: 53.8 million

Like amoxicillin, azithromycin is used to treat common bacterial infections, including lung infections and some sexually transmitted infections.

6. Omeprazole (Prilosec)
Type of drug: proton pump inhibitor
Used to treat: acid reflux
Number of prescriptions in 2010: 53.4 million
Number of prescriptions in 2009: 45.4 million

About 20% of Americans suffer from stomach pain and burning related to acid reflux at least once a week, resulting in the popularity of Prilosec. Risk factors for acid reflux include obesity and cigarette smoking.

Read more: http://healthland.time.com/2011/04/19/americas-10-most-popular-prescription-drugs/#ixzz1KKTgH82U

5. Amlodipine besylate (Norvasc)
Type of drug: calcium channel blocker
Used to treat: high blood pressure
Number of prescriptions in 2010: 57.2 million
Number of prescriptions in 2009: 51.3 million

The risk of developing high blood pressure increases with age, affecting about two-thirds of people over 60 (note: the oldest of the country's 77 million Baby Boomers are turning 65 this year) — one reason that blood-pressure medications make up three of the top 10 most prescribed drugs.

4. Levothyroxine sodium (Synthroid)
Type of drug: thyroid hormone
Used to treat: low-functioning thyroid gland
Number of prescriptions in 2010: 70.5 million
Number of prescriptions in 2009: 66 million

A common cause of low thyroid hormones, primary hypothyroidism affects 9% of women and 1% of men. Symptoms include slow speech, lack of energy, weight gain, hair loss, increased sensitivity to cold, and dry, thick skin. The risk of hypothyroidism increases with age, which accounts in part for the increasing number of prescriptions written.

3. Lisinopril (Prinivil)
Type of drug: ACE inhibitor
Used to treat: high blood pressure
Number of prescriptions in 2010: 87.4 million
Number of prescriptions in 2009: 82.8 million

Out-of-control stress contributes to high blood pressure, which helps explain why the condition may be more common in the poor and in people whose jobs have high levels of responsibility but little control over outcomes.

2. Simvastatin (Zocor)
Type of drug: statin
Used to treat: high cholesterol
Number of prescriptions in 2010: 94.1 million
Number of prescriptions in 2009: 83.8 million

Nearly 36 million Americans have high cholesterol levels, high enough to more than double their risk of heart disease and stroke — and to keep rates of prescriptions for cholesterol-lowering statins sky high.

1. Hydrocodone with acetaminophen (Vicodin)
Type of drug: opioid
Used to treat: pain
Number of prescriptions in 2010: 131.2 million
Number of prescriptions in 2009: 128.2 million

Vicodin is prescribed to treat chronic pain, which affects 20% to 30% of adults and is twice as common in women as in men. The pill is also commonly prescribed to treat pain following dental procedures. Though drug misuse may account for part of the reason that hydrocodone is so popular, fewer than 3% of people prescribed opioids for chronic pain actually develop new addictions.

Read this far, good! You are serious about your health, I am sure these drugs in your life would be as rare as the black swan pictured above!

Metaphors in life ( and trading)

Do you use metaphors in life? I have found them useful.These are like the crutches which help me navigate the complexities of life. One of my favorite one being- life isn't about waiting for the storm to pass, it's about dancing in the rain! Or this one- life is what happens to us while we are making other plans!

Why am I talking metaphors today, well because this is all about conditioning the mind to operate in the zone, the state of perfection! I trade the financial markets, which are very competitive in nature, nothing less than perfection will do in this business! The mind over market concept is now formally studied as part of behavioral finance, the psychology of the trader. The mentors, I have come to respect in this industry, all tell me that trading is one third psychology, one third execution and one third setups. So if i just mastered the charts alone, it is just one third of the battle:-)

I was researching how people in the financial market community use metaphors in life. I came across psychologist Ruth Barrons Roosevelt article
"I like to think of trading as sailing. Here you harness the forces that are there. You take into account the wind direction and velocity, the currents, and your destination. You've got your charts to guide you and you constantly adjust to nature's forces, sometimes pointing into the wind, sometimes running before the wind, sometimes tacking, but always in partnership with your boat, your crew, the wind, and the currents. Sure, storms can come up, but you can always let down the sail and anchor and wait out the storm. You work with the forces that are there, the forces that are much bigger than you, but you enjoy the journey, the day, the sport, and you're confident you can get to your destination, your port, your safe harbor."

Of course some people compare trading to fishing where the patience is the key element people are trying to focus on. Some compare trading to a sniper, or a pray -predator relationship. Look for the opportunity and jump on it, no room for error. It all depends on ones mental makeup which one you like more, obviously the aggressive types will prefer the pray predator metaphor, but the same metaphor may have negative connotation to the conservative mindset traders( BTW the picture above is of a lioness I captured in my Nikon DSLR, look at the intense eyes, that kind of focus and intensity is what you need, if you believe in the pray-predator metaphor).

I like the sailing analogy to trading that Ms. Ruth provided, to me trading is a complex endeavor, and sailing is apt representation, the winds - if you get tailwinds that is, will make for a soaring bottom line, on the other hand if you have headwinds...well you need to learn to deal with that too, else the boat sinks :-) So what are the metaphors you use in your life or work:-)

What season is this?

This has been a strange winter, the more I think the winter days are over, the more I get a gentle reminder- few more days my dear! Some more days of clouds, little less of sun shine, the frosty mornings and the occasional light and beautiful white snow..as if the world has been painted white, pure, pristine.... who can say no to that! The picture above is part of my backyard and that tiny hint of snow is what I am talking about...ever so gentler, kinder, softer snow..the one you don't have to worry about getting to work or clearing the driveway.

Although winter has over stayed and in some cities on the west coast totally surprised their residents (San Francisco recently had its first snow in 35 years)- I am not complaining!These things of nature make me emotional at times, recently read a poem by Mary Frye, normally read during funerals, talks about how our near ones never leave us even when they die- they are in gush of wind that touches us, the snow that falls on our garden, the birds that chirp...here it is and do not get too sentimental :)

Do not stand at my grave and weep,
I am not there, I do not sleep.
I am in a thousand winds that blow,
I am the softly falling snow.
I am the gentle showers of rain,
I am the fields of ripening grain.
I am in the morning hush,
I am in the graceful rush
Of beautiful birds in circling flight,
I am the starshine of the night.
I am in the flowers that bloom,
I am in a quiet room.
I am in the birds that sing,
I am in each lovely thing.
Do not stand at my grave bereft
I am not there. I have not left

Happy New Year

New year is here and I hope this year brings in the change we always look for and which always seems to fall short..the new year is like a clean slate , we can make this year into whatever we would like it to be- good , bad, ugly..err not ugly, I hope! So let us do our very best and work towards this year being the most productive year of our life!! I know that is going to be my resolution! I plan to outdo myself...try hard even if it means going to the brink , to the precipice..and hopefully not fall off the cliff trying :-)

With that bit of optimism, here's something I want to share ( with permission from author)- this is from a dear friend of mine, who happens to be my classmate from IIT Kanpur, and who is a senior executive in a Technology firm might I add :-) We fondly call him Ramki.

Ramki this is dedicated to you!!

[In the spirit of re-living the lost pleasure of writing letters, minus the handwriting]

To,

A few more tears of happiness listening to soulful music,
A little more tiredness as you work yourself towards a worthy goal,
A few more thoughts towards the plight of the less fortunate,
A little less annoyance at the machinations of the keepers of power,
A few more hearty conversations with your best friends(for life),
A lighter load of worries of the past and anxieties for the future,
An increased zest in the service of those whom you love unconditionally,
An increased responsibility towards the world which made you,

From,

The blessings of those who helped you be what you are, and
The company of those who truly make you live your life to the fullest,

Subject: to the best of health, happiness and fun,

Dear Sir/Madam,

I humbly request your New Year visit you, and stay all year long!

as ever,
Ramki

2010 in Rear View

As the year 2010 draws to a close, lets see how am I going to remember this year. I want to document this because days will turn into months and months will turn into years and I can open up my diary and look back on the concluding year of the first decade in 21st century!

I will divide this post in couple of headers- Political, Economics, Finance, Technological, Entertainment, Geo Political and Climate. So let us get started:

Political- This was the year when we saw Obama slipping in approval ratings, Democrats losing Congress and the emergence of Tea Party in the national politics. What it means is , although Obama has done commendable work in dealing with this great recession, people in general are disillusioned with the pace of progress, particularly with unemployment still at 9.8%. Clearly Mr. Obama needs to get his act together and work with a vigor if he wants to get reelected in 2012 and seems like White House has already started a major overhaul in its administration.

Economics- This was the year which added a new word to our daily vocabulary - QE2 or the second coming of Quantitative Easing. So far it seems to have worked, as the stock markets close near 2 year highs. Does that mean economy is out of the wood? Not by a far shot, the unemployment is still close to 10%, the seven million jobs lost in recession have not been recovered and are probably not going to come back in near future either, the GDP although growing, it is pretty anemic like 1%. Corporate profit has registered some 20% year over year gain this year , but the outlook for 2011 is still murky. The deficit is only ballooning and with the recent extension of Bush era tax cuts, is only set to get worst. The extension of tax cut at a price tag of whopping $858 billion, although looks good short term, seems more like a sign of desperation in the fiscal policy think tank of the country.

Finance- This has been a crazy year for the markets and I would think the feds QE2 policy may have played a role. Here are some numbers in terms of price increases we saw this year(Source FT.com).
Silver : 72%, Gold:28%, Crude Oil:22%, Corn:52%, Wheat 48%, Cotton- 103%, Lumber- 46%, Coffee- 60%...the list goes on. Although the readers of this blog know that I am a Gold bull for a long time, but this rapid price increase in essential commodities is really worrying trends for the common man. I hope in 2011 Central Bankers around the world will stay guard for inflation to rear its ugly head.

Technology- Of course Mark Zuckerberg got Person of the Year recognition from Time magazine for his obscenely successful brainchild Facebook. The other notable trends are Cloud Computing really becoming main stream.Ebay, US department of Agriculture and other such big entities have moved to cloud services, picking Microsoft's Azure as platform of choice. Read somewhere that the US Government is planning to consolidate its 800 data centers and moving to cloud. The iPad form Apple marked the arrival of tablets in a big way and the Smart Phone adoption continued its surge.

Entertainment- We broke some records this year in Hollywood and also the gaming industry. The epic tale "Avatar" really blew me away with its grandeur , extravaganza and the message itself by director James Cameron. I had truly never seen a movie quite like that in my life, the money spent on 3D IMAX seemed quite worth it. I later picked the Blue Ray disc as well just to find out what the Director had to say about his experiences making this film. There is something about these extraordinary successes, and it all starts with great thinking and here's a quote from the genius Cameron himself "If you set your goals ridiculously high and it's a failure, you will fail above everyone else's successes". Avatar has been the biggest grossing movie ever, with $4 billion in revenue and counting.The other notable success of the year was the video game- Call of Duty, black Ops, this may have set a new record in gaming too, with total sales already crossing the billion dollar mark!

Geo Political The year is closing with tension between North Korea and South Korea, we need to see what is in store for 2011. This year was also notable for leaking of sensitive US government document by Wikileaks. The founder of Wikileaks , Julian Assange , was the most popular choice for becoming person of the year online poll by Time magazine, he ended up becoming the runner up. The leaks have created embarrassing situation for US government which now has some explaining to do to its partner countries....and i know that's an understatement...there's lot more to it, probably deserves a separate blog post in itself.

Climate This year we saw devastating flooding in Pakistan, and the catastrophe in Haiti by the 7.0 magnitude earth quake which killed some quarter million people in minutes. Lessons, humans are but at the mercy of mother nature...let's take good care of it otherwise the day of reckoning is not far away :-(

Watch your thoughts...

Came across the following few lines, epiphany of sort..for me anyways.

Watch your thoughts, for they become words
Watch your words, for they become actions
Watch your actions, for they become habits
Watch your habits, for they become character
Watch your character, for it becomes your destiny

Author Unknown.

Character is not built overnight, it is a long arduous journey, it is going to test you on many occasions and sometime it could be tempting to dump it...but should we ever? My answer is no,,, when the going gets tough , the tough get going. You beat the odds by perseverance, you beat the odds by tenacity and above all you beat the odds by following a good plan. I am a Project Manager and one of the basic thing you learn in Project Management is the mantra of -Plan, Execute, Control and Review. I for one do not believe in cutting corners, taking shortcuts, deceiving people, resorting to lies...I find my self sleeping peacefully at night when I follow these principles. As a certified Project Manager (my PMP designation) , I am bound by ethics, I can lose my designation for being dishonest...get it, for me it is not just a moral obligation it is how I make a living!

Given the preponderance of evidence in support of good character, is it any surprise that the above quote resonated deep inside me? Yeah I know that is a rhetorical question, but I mean it in all its seriousness and as the opening line of above quote tells you...it all starts with your thoughts. So let us make a pledge to cleanse our thoughts of the negatives, purge the defeatism, the pessimism and build a strong character!

This post is dedicated to all my friends and well wishers who have stood by me all these years... thank you :-)

The Starfish Story

Have you heard about the Starfish story? I came across it recently. Although unaware of the story per se, I have unconsciously done this all my life.... trying my bit...however small......
Here's the story by Loren Eisley:

Once upon a time, there was a wise man who used to go to the ocean to do his writing. He had a habit of walking on the beach before he began his work.

One day, as he was walking along the shore, he looked down the beach and saw a human figure moving like a dancer. He smiled to himself at the thought of someone who would dance to the day, and so, he walked faster to catch up.

As he got closer, he noticed that the figure was that of a young man, and that what he was doing was not dancing at all. The young man was reaching down to the shore, picking up small objects, and throwing them into the ocean.

He came closer still and called out "Good morning! May I ask what it is that you are doing?"

The young man paused, looked up, and replied "Throwing starfish into the ocean."

"I must ask, then, why are you throwing starfish into the ocean?" asked the somewhat startled wise man.

To this, the young man replied, "The sun is up and the tide is going out. If I don't throw them in, they'll die."

Upon hearing this, the wise man commented, "But, young man, do you not realize that there are miles and miles of beach and there are starfish all along every mile? You can't possibly make a difference!"

At this, the young man bent down, picked up yet another starfish, and threw it into the ocean. As it met the water, he said, "It made a difference for that one."

The story left me shocked..initially and then it sank in. Just like the wise man, we think high about ourselves...even narcissistic sometimes...all talk about doing good and believing in this cause , that cause ... but a lot of time it is just that...mere talks- we the arm chair philosophers!

Greatness is not in having opinion, true greatness lies in doing something. Greatness lies not in talking the talk but walking the talk. Helping someone, making a difference..even if for very few. Let me leave you with this thought...how many people you think you have helped in your life and made a difference? When you think of success, I urge you to assess yourself in that matrix :-)

The Indian Penal Code - 150 years!

A dear friend of mine, a classmate from IIT Kanpur, who is a very senior official in the Indian Police Service (IPS), notified us of the Indian Penal Code celebrating its 150th year! Shame on me, I didn't know that! Here's the article he published- in case you wanted to know more about IPC, the back bone of the Indian criminal justice system!


Amitabh Thakur, IPS, the author of this article is on a study leave these days at IIM, Lucknow, India- one of the best business schools in that part of the world! I hope super cops like him continue to inspire the current generation Indians and work towards unity and integrity of the resurgent India! Hats off to you Amitabh!!
(Published by permission from Amitabh)

Sate of the market- QE2

Continuing on the theme of fall colors, the above picture is from my garden too. Maple leaves falling off from that little thing I planted over five years ago. That little thing ( the maple tree) has now grown over 10 feet :-)

I wanted to touch on the state of the market as we close the month of October. The last two months have been a very strange market. despite watching this market every single day the last 10 years, I could not put my finger on its pulse. Of course if anything I have learned all these years , it is that, expect the unexpected :-)
Normally when bonds rally, when Yen rallies one concludes that there is risk aversion in the air and you would expect a sideways to down equity market, a contracting commodities market. The last two months have been anything but normal, every thing has rallied in sync, the correlation that existed the last few years seems to have all turned upside down.

I have looked for what the pundits are saying in terms of explaining these moves. One answer the QE2 ( Quantitative Easing 2) program which the feds are supposedly going to launch first week of November...although no one knows for sure...yours truly included. Why on earth fed will do quantitative easing when the last easing has not helped much. Doesn't the fed run the risk of stoking inflation if they did that? In my criticism, I guess I am being moderate , the bond guru Bill Gross has taken it a step further and calls it a Ponzi scheme.

I don't think this weird market can continue for very long. Something gotta give- either the bonds are going to sell off hard ( which they have already started with a recent 35 basis jump in yields) or Gold, Silver and the likes are going to come crashing down. In the meanwhile, this liquidity driven market has one clear victim- USD is selling off across the board, here are some of the popular currency pairs:

Euro has been flirting with 1.40 , from a recent low of 1.18 ( April 2010)
GBP is above 1.60 compared to a recent low of 1.44 ( April 2010)
CAD ( Canadian Dollar), AUD (Australian dollar)- almost at par with USD (99.9) , compared to in 80s (AUD) and 90s(CAD) back in April. Even slightest of move in the market, and these currencies will overtake USD.
CHF (Swiss Franc) - new all time high: 1.06 from .9 something back in April ( so it has actually overtaken USD).
Japanese Yen -new 15 year high at 80.35 from 90 something back in April ( within striking distance of 79.70- the all time high for this pair).

Precious metals are also on fire
Gold at life time high near $1375 /oz from $1100/oz in April ( not adjusted for inflation).
Silver at life time high $24/oz from $19/oz in April ( not adjusted for inflation).

Other metals like Copper, Iron, Zinc are all in steep bull run.
Agricultural commodities like Wheat , Rice, Sugar, Soybean, Corn are all breaking to new highs ( wheat has jumped 46% since June).

Given the deficit US is running, these macro moves are not unexpected, what worries me is the speed with which these moves are unfolding. A real threat of stagflation- where there is inflation (even hyperinflation), but no growth in real wages or economy to support it. All these forces have been unleashed on the financial markets, thanks to the speculation of QE2 which is now priced in the market. I am not sure if fed ( Federal reserve) will really follow through with its (implied) promise for QE2, it all seems to be setting up for a big disappointment. Meanwhile we are in uncharted territory... with uncontrolled forces unleashed in the markets...time for a new normal.

A long break!!!

I took a long break from blogging! This was not planned, this was not pre meditated...it just happened, that thing called life! Sometime it just overwhelms you and the things you love to do like writing..takes a back seat! I am not necessarily happy about it, but hey this too will pass and I will return to a more normal self!!

The picture above is how my garden has turned this fall. There is something about this season, when leaves change colors and then eventually start to fall off- ready to renew...a new beginning..kinda how I feel today :-)