Padma Awards: Dhoni and Harbhajan Saga

Perhaps you may not agree with me, but the current anger by the Sports Minister on Dhoni and Harbhajan was uncalled for. The President may be the presiding deity for government officials, but is still a public servant. And therfore, that the two were unable to show up should not be held against them and is their perogative. Perhaps players's lack of respect for the awards is a reflection on what a sham and tamasha these awards have become over the ages.

The ministers who have made no real contribution to sports, or for that matter to any other thing, get to show their importance through angry (uncalled for) outbursts. They deserve to be snubbed. As for our sportsmen (and sportswomen) the award is only a recognition for their achievement and not the achievement themselves. Not being present on the award ceremony does not make their contribution less great.

Satyam acquired by TechM: Analysis

TechM emerged today as the highest bidder for Satyam. While this is puts TechM in a new league, the question that must be asked is the following

• Did TechM have an information advantage as there was one common member on the boards of both the companies? Now don't take me wrong, the information passed does not necessariy have to be explicit. Just the fact that the board member, who has a fudiciary responsibility to protect the interest of shareholders not stopped techM from bidding where it did means they had an advantage.
• Had it not been the case, would it not have made more sense for L&T to have bid higher since it already has a 12% stake in the company?

If this is the case then TechM got satyam for a bargain and perhaps this explains the jump in price in TechM's shares.
IBM which was rumored to be bidding for Satyam was clearly never going to be in the race. It had the least to gain. Why should an IT player such as IBM take only a financial risk of class action suites. It already has access to customers and to offshoring (remember it already has 50K+ employees in India). Same for Cognizant (it therefore withrew at the 11th hour). Wilbur Ross (a financial player) was only going to to be interested in partnership with a strategic player and at cheaper valuations. In normal times it could have leveraged and may have been able to offer higher valuations. Then again, these are not normal times.

Freidman vs Keynes

Milton Friedman, notes that, "There are four ways in which you can spend money. You can spend your own money on yourself. When you do that, why then you really watch out what you’re doing, and you try to get the most for your money. Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I’m not so careful about the content of the present, but I’m very careful about the cost. Then, I can spend somebody else’s money on myself. And if I spend somebody else’s money on myself, then I’m sure going to have a good lunch! Finally, I can spend somebody else’s money on somebody else. And if I spend somebody else’s money on somebody else, I’m not concerned about how much it is, and I’m not concerned about what I get. And that’s government. And that’s close to 40% of our national income."

A certain Keynes may argue that the government is “.. Of the people, By the people and For the people”, spending people’s money or at least is supposed to be under a democratic system. Perhaps, it was this belief that led him to propose government intervention to prop up the economy.

So whether you believe in the ‘invisible hand’ of the market as proposed by Classicists or chose to follow the Keynesians, could ultimately depend on your view of the government’s sincerity

My 2 cents

1. Both the World Views (Weltanschauung) are flawed. They are joined at the hip by economics, which is based on the assumption of rational behavior of humans
2. I for one don’t want to take it too seriously for the following reasons

• I am not sure if humans are capable of being always rational
• Even if they are, how do you define rationality (Economics only measures rationality on one dimension aka money. Humans can be rational on many dimensions while appearing completely irrational on money)

While, both approaches can work wonderfully at various times (as seen in the past), the tremendous belief in their own worth (hubris) is their tragic flaw (hamartia) and ultimately causes reversal of fortunes (peripetia)

Perhaps, a mix of both approaches such as seen in India. Free (relatively) markets tempered with government oversight and occasional intervention may be the way forward