Thought for the day
”I have been impressed with the urgency of doing. Knowing is not
enough; we must apply. Being willing is not enough; we must do."
-
Leonardo da Vinci (Italian, 1452-1519)
Word for the day
Geep (n)
The hybrid offspring of a goat and a sheep
(Source:
Dictionary.com)
Teaser for the day
If BJP makes a government in Delhi and works for common
good, in 2018 no one will remember how the government was formed.
For all you know AAP may not even be there to remind
people!
Mythology of bubbles
In Hindu mythology, once the forces of good (Sura) and evil
(Asura) had a protracted battle. The battle lasted so long that both the groups
exhausted all their resources and valor. Completely tired, wounded, frustrated
and exhausted, they approached the savior Lord Vishnu. The Savior advised them
to go and explore the great ocean to find new resources and vigor to make a fresh beginning.
Following the advice, both the groups went to the great ocean
and explored it extensively. During their exploration they discovered huge
amount of wealth and resources that included the nectar that would immortalize
the consumer and venom that would destroy whoever consumes it.
Realizing that if the evil forces get the access to nectar and
other resources found during the exploration it would seriously jeopardize the
interest of the forces of good, Lord Vishnu tricked the forces of evil and
appropriated the entire nectar for consumption by the forces of good.
Lord Vishnu also requested the almighty Lord Shiva to absorb the
venom so that it does not harm anyone and the balance of the universe is
maintained. Obliging, Lord Shiva drank the entire venom and preserved it in his
throat.
Post this the forces of good became more powerful. But whenever
they deviated from the path of common good, they were overpowered by the evil
forces and dethroned. Each time only after a great deal of repentance they
would be rehabilitated with the help of Lord Vishnu, Lord Shiva or the Mother
Supreme.
Over the years I have realized that it is not just a mythological
story to be heard during religious ceremonies and forgotten immediately
thereafter. It is also not a usual morality emphasizing victory of good over
evil. It is much beyond. This applies to all aspects of life, even economics.
In modern economic parlance, the ocean exploration is akin to
the period of irrational exuberance that eventually lead to building of a
'bubble' in the economic sphere.
Bubbles are initiated when all the participants get tired,
frustrated and exhausted from prolonged economic weakness. At that point in
time, all the stakeholders muster the courage and supported by the 'authority'
do things they would never do in normal times. They do excessive and seemingly
irrational borrowing, investing and spending. Capacities are built to the scale
unfathomable during normal times.
The nectar or the good that emerges from these bubbles is shared
by all. However the venom is consumed only by the financial investors who
invariably end up poorer after every bubble is burst.
If you are not able to correlate to what I am saying - imagine
would India be a ITeS superpower without Y2K or technology bubble during late
1990s! Had we built so many houses, roads, malls, power plants, cement plants
etc. during last decade but for a credit bubble! Would capital be so easily and
cheaply available to Indian entrepreneurs without a QE bubble in the west!
...to continue tomorrow
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