Vijay Kumar Gaba

Sunday, October 19, 2014

Change in market context

Thought for the day

”In all history there is no war which was not hatched by the governments, the governments alone, independent of the interests of the people, to whom war is always pernicious even when successful."

- Leo Tolstoy (Russian, 1828-1910)

Word for the day

Bel-esprit (n)

A person of great wit or intellect.

(Source: Dictionary.com)

Teaser for the day

I am a young political aspirant.

Please give me two good reasons why should I join the Congress Party.

Change in market context

The domestic political events and global market movement last week highlight a change in short term market context.

The reverses suffered by the Congress Party in recent Haryana and Maharashtra assembly elections have further strengthened the ruling BJP. The government is now in an even better position to pursue its socio-economic agenda of inclusive growth. The results are also a serious setback for the practices of "crony capitalism" and "crony socialism", traditionally followed by ruling political parties and political coalitions.

The short term negative could be deeper acrimony at personal level leading to internecine political non-cooperation prejudicial to common good.

The reduced propensity of "crony capitalism" could also cause pain to a lot of enterprises traditionally dependent on political patronage. Financial markets and investors will not remain untouched by this pain. DLF might be only be a small indicator of this trend.

Much awaited reforms in administrative pricing mechanism of diesel and gas prices, material administrative reform in employment regulations have certainly strengthened the optimism over agenda of the new government.

Globally, the markets got impregnated with the hope of a new round of monetary stimulus.

US monetary authorities are visibly perturbed at the prospect of EU slipping into deep recession and Euro taking a massive plunge. Many are already talking about a reversal of "tapering" and beginning of a fresh round of QE.

ECB is under pressure to enlarge the scope of its monetary stimulus and increase the extent of monetary support.

The bond market rally has surprised many economists and investors. The underlying theme seems to be total disbelief in fiscal stability that is claimed to have been achieved post 2009 collapse.

The "crash" in commodities, from energy to metals to food, has exacerbated the imbalance in the global economy. The producers are facing a serious fiscal and economic challenge at a time when most large consumers are witnessing slowdown in consumption.

These event confirm my long standing belief, viz., For next five years at least, the upside triggers in Indian equities would mostly be domestic, e.g., improvement in macro fundamentals, improved political environment post 2014 election, inflation peaking out next year on high base effect, peaking of rates, improvement in external trade, and pick up in investment cycle.

Whereas The downside risk to the market would mostly be due to external factors. Historically, large FII flows in a short period of time have caused huge volatility in Indian equity markets. A reversal of USD carry trade, if and when US Fed decides to moderate liquidity conditions in US, will certainly cause this event.

I do not believe that these events require any immediate change in investment strategy. Nevertheless, this does warrants a review..........to continue

Friday, October 17, 2014

Cheaper food prices do not cure sick metabolism

Thought for the day

”Better a diamond with a flaw than a pebble without."

- Confucius (Chinese,551-479BC)

Word for the day

Mythomane (n)

A person with a strong or irresistible propensity for fantasizing, lying, or exaggerating.

(Source: Dictionary.com)

Teaser for the day

Should Congress sack A. K. Anthony for misguiding the party on reasons for loss in 2014 general elections?

Cheaper food prices do not cure sick metabolism

The conspiracy theories on falling oil prices are stretching it too far, in my view. I guess, most theories ignore that materially lower prices could cause more harm to the global economy than the higher prices.

It is pertinent to note that the breakeven price for North America shale gas, which is popularly believed to be the primary reason behind fall in global crude prices, is much higher. Since 2007 the fiscal breakeven for crude oil has also risen materially for most producers.

As per some estimates, "If crude prices stay low for long, almost all the major oil producers will have to start dipping into their foreign reserves to fund their welfare states and military apparatus. The "fiscal break-even" price needed to cover the budget is $130 for Iran, $115 for Algeria and Bahrain, $105 for Iraq, Russia, and Nigeria, and almost $100 even for Abu Dhabi. The Saudis themselves are probably well above $90 by now.

This means that they will have to sell holdings of foreign bonds, assets, and gold to plug the gap. Russia has run through $7bn in recent days defending the Rouble. The scale of this could be huge, and it comes at a time when China has stopped accumulating reserves for its own reasons, taking away the biggest global source of fresh purchases."

Therefore, saying that Saudis are targeting a lower price to squeeze enemies like Iran, Russia, and the Caliphate does not make much sense to me.

I believe it is more of a function of economic and financial factors.

On economic side we have seen decline in consumption growth while supply has grown consistently. China could be a prominent factor in slower consumption demand, as the debt fueled economic growth has a taken a breather and outlook appears subdued at best. But it would interesting to evaluate the collective contribution of factors like (a) demography especially in Europe and Japan; (b) fiscal correction in Europe, US and many emerging markets like India leading to lower government spending, lower subsidies, and higher taxation; (c) better energy efficiency; (d) substitution effect due to higher use of renewable; (d) Fissure in OPEC cartel as Iraq and Libya produce more to finance reconstruction work, Iran produces more and sell cheap to fight global sanctions, and non OPEC swing producers Russia and USA also produce more and consume less.

In most of these cases, the lower prices may not stimulate more consumption and hence push the demand supply equilibrium to lower levels. The lower revenue for producing countries and financial stress on producers in North Americas who have borrowed heavily to produce relatively expensive shale gas, could cause seriously damage the global financial stability, which in any case is heavily predicated on the persistently loose monetary policy.

Moreover, a weaker fiscal ability of producers to pursue welfare and development agenda, could refuel the simmering civil unrest and strengthens non-state disruptive elements.

To conclude, in my view, lower commodity prices due to lower demand is seldom good for the economy. It is like poor appetite due to sick metabolism, which structurally weakens the body. Lower prices either due to more supply or higher productivity is what we should desire.

Thursday, October 16, 2014

Lucky oye!

Thought for the day

”Life is really simple, but we insist on making it complicated."

- Confucius (Chinese,551-479BC)

Word for the day

Habitué (n)

One who habitually frequents a place.

(Source: Dictionary.com)

Teaser for the day

High Court has disqualified 5 HJC MLAs with retrospective effect.

Does it render the legislative decision taken with their votes void ab initio?

Lucky oye!

Yesterday I expressed my concerns over investors in Indian markets relying too much on PM Modi's luck and lower global energy prices. I feel a prudent investment strategy needs to evaluate sustainability of both.

Insofar as the "luck" part is concerned, it is rather simple. Considering PM's lucky time started 14yr ago, some caution would be in order.

Energy prices are far more complex. This involves too many, often diverging, consideration - from geo-political, economic, to financial.

To test the sustainability of current or even lower crude prices, I divide these reasons into three distinct categories - (a) speculative factors predicated on various conspiracy theories; (b) financial reasons arising from currency and commodity market dynamics; and (c) economic reasons based on global consumption/strategic storage demand and supply dynamics.

Conspiracy theories

Numerous conspiracy theories are floating around to explain the precipitated fall in global crude prices, despite escalating geo-political tension especially in the Middle East Asia and Eastern Europe. For example, energy analyst Akhil Handa highlighted the following chatter in the energy markets.

Attempt to corner Russia

Saudi not cutting the production and US increasing production to contain Russia, which derives almost half of its revenue through oil and oil-linked gas sales. According to Sberbank CIB, if oil prices average the current level of $90, then Russia would run a 1.2 per cent budget deficit in 2015 and needs oil to be at about $104 to balance its budget. US and EU have already imposed sanctions on Russia as a reprisal of Russia's Crimea annexation and Eastern Ukraine overtures.

Saudis playing tricks to retain control of oil market

The plot thickens with another conspiracy theory doing the rounds. The Saudi has seen the oil price stable through international geo-political crisis, first by increasing production to accommodate Iran, Syria and Sudan's decreasing production and then by accommodating Iraq's rising production. Saudi has acted as the only global swing producer, which was in control of both its oil production and economy to maintain the price stability.

However with the increase in US oil production- up almost 70 percent in the last 6 years and at its highest since 1986, the Saudi's appear losing control over global oil market. In a bid to restore balance Saudi could be playing its cost advantage against the higher cost shale oil producers. In this scenario, Saudi will perhaps have to let oil prices slide to $75-80 and let it stay there for a while for some US drillers to move out of the businesses and hence pricing power to get restored back with Saudi.

Saudi has already made the first move by reducing its benchmark official selling price to levels lower than the 2008 levels. The adjustment to selling price can be a precursor to major adjustments to production, which will have to eventually follow in case the demand scenario remains weak, in contrast to many market observers belief that Saudi will be able to maintain its market share.....to continue

Tuesday, October 14, 2014

Devil's advocate

Thought for the day

”Death and life have their determined appointments; riches and honors depend upon heaven."

- Confucius (Chinese,551-479BC)

Word for the day

Accidence (n)

The rudiments or essentials of a subject.

(Source: Dictionary.com)

Teaser for the day

List names of 21 politicians whose political career will end on 19th October 2014!

Devil's advocate

The IIP growth data for August 2014 mandates a reality check on Indian economy. It validates our premise that investment led growth is not a valid theme as yet.

In my view the IIP growth data for September may not be substantially better than August . Given the sub-optimal monsoon this year and slow service sector growth, 2QFY15 GDP growth may not meet rather optimist expectations.

Though I do not see a material let down in the optimism over new government in immediate term, the GDP growth forecasts may likely see some downward revision.

In this context the precipitated fall in global energy prices in past six months is critical. Lower energy prices are providing strong support to economic optimism in the country. This single factor is catalyzing optimism over Balance of Payment, inflationary and therefore rate expectations, improvement in domestic power production through cheaper import of coal and gas, improvement in financial stress levels as the struck infra and power sector projects become viable due to lower rates and higher availability of fuel.

When I try to build in a rising energy price scenario in my investment portfolio, the likely outcome is rather unpleasant.

Hypothetically, a 20% rise in crude and international coal prices from here will make macro situation look much more precarious than even 2011-12. The diesel deregulation plans will be deferred again. Electricity prices will go up by another 20-25%. Global demand will take a further hit impacting exports. CAD will worsen. INR will depreciate further and faster. Inflationary expectations will rise materially forcing RBI to break the pause on rates. Savers will be crushed as real rates take a further dip, leading to sharper decline in already receding savings rate. Financial stress will rise as more projects become unviable due to higher rates, lower demand, waning pricing power.

In short we will have a serious problem of stagflation at a time when global money markets will be tighter and investment climate seriously clouded.

Remember that post Lehman collapse decline in global energy prices, we had seen a sharp reversal from mid 2009. This occurred without any material improvement in global economic conditions. Therefore, a 20% rise in energy price scenario may not be entirely hypothetical.

It is therefore critical to examine the global energy market trends and make a realistic assessment about how sustainable could the current energy prices be.

Another factor that needs to be evaluated is whether global deflationary conditions are really good for Indian economy or these just provide a temporary feel good in terms of lower import bill.

Many commentators and analysts are relying on the "luck" of PM Narendra Modi for continuous improvement in economic conditions. I see their point. But my astrologer suggests that PM is likely to hit a rough patch in 2015.

...more on this tomorrow

Monday, October 13, 2014

Some random thoughts

Thought for the day

”It does not matter how slowly you go as long as you do not stop."

- Confucius (Chinese,551-479BC)

Word for the day

Frisson (n)

A sudden, passing sensation of excitement; a shudder of emotion; thrill

(Source: Dictionary.com)

Teaser for the day

"57% of Mumbai citizens surveyed say our MLAs are corrupt."

This reflects upon whom?

Some random thoughts

Nobel prize

"You don't need to wear a patch on your arm to have honor", Lt. Kaffee (Tom Cruise) told marine LC Harold Dawson (Wolfgang Bodison) in the last sequence of popular 1992 Hollywood drama "A Few Good Men".

Two gentlemen Kailash Satyarthi and K. Radhakrishnan have made India and all Indians feel proud in past two weeks. These two have certainly inspired millions of youth and children to pursue the path of justice and excellence.

I have still not heard any voice asking Bharat Ratna for them. I will indeed not be surprised if a large majority of our politicians and studio experts, who had a rather cacophonous debate on the subject few months back, had never heard about them before their recent accomplishments.

I am also confident that their exist thousands of more similar silent achievers who do not need any medal in recognition of their services to the society. It is the society which honors itself by recognizing their effort. Looking back at the quality of people our government/society has recognized in past couple of decades reflects poorly on us, in my view.

State elections

Many readers have asked why have I not written anything on the two important state elections scheduled to be held this week. Perhaps my extensive coverage of last general elections has conditioned their expectations.

I feel that these two state elections are just a continuation of the political trend that began to take shape four years ago and got firmly established with the May 2014 general elections. I do not see any change in that trend. I see a decisive mandate against agenda of crony socialism and divisiveness.

I have not traveled to Maharashtra recently. But from my discussion with people on the ground there I understand that Shiv Sena will be the biggest loser in these elections and BJP will be a clear winner.

Insofar as Haryana is concerned, I did make couple of trips to the state in past three weeks. I could see women and youth voters breaking away from traditional caste and personality driven politics.

Contrary to most opinion polls, I feel INLD will only get support of 50+yrs old Devi Lal loyalists and some stray youth. Kuldeep Bishnoi, Vinod Sharma, Gopal Kanda etc. may be relevant only in 5-7 constituencies. It is mostly between Congress and BJP, with BJP having an edge there also.

I am also not surprised to see Akali Dal and JDU putting their weight behind Chautala's INLD. These relatively stronger regional parties need to find some common ground to create a viable national alliance against Modi led BJP.

However, I still feel (see here) that most degenerated socialist would get extinct in next couple of decade and all well meaning socialists would congregate under Congress umbrella to make it a right vs. left politics in the country.

Friday, October 10, 2014

Power of denominator

Thought for the day

”The lack of money is the root of all evil."

- Mark Twain (American, 1835-1910)

Word for the day

Concomitant (Adj)

Accompanying; attendant; occurring or existing concurrently.

(Source: Dictionary.com)

Teaser for the day

I heard Modi implicitly claiming in an election rally that for the first time in the entire history of Bharat because of him the world community has recognized India as a force to reckon with.

Do RSS and other Hindu nationalist organizations accept this?

Have not we always believed that Bharat had been a world leader since the beginning of human civilization?

Power of denominator

My father once explained me the formula of happiness. He said, "your happiness is equal to your income divided by your needs. If your needs are zero, your happiness is infinite and if your needs are infinite, your happiness is zero, notwithstanding whatever is your income.

The problem with most people is that they focus only on enhancing the numerator (income in this case), which is completely irrelevant if you leave the denominator (in this case needs) uncontrolled. The better way to control problems is to focus on denominator, while keeping an eye on the numerator.

Applying this formula to the current economic conditions provides some interesting insights for the managers of the economy. For example consider the following:

The headline employment data in U.S. has shown steady improvement in past many months. The current reported unemployment rate is down to about 5.9% from post Lehman collapse period high of close to 10%. This sounds great at once. But how do we explain the struggle with low inflation, poor wage growth, slow household consumption growth, and higher number of temporary and part time workers, more people living off food stamps and rising stress on state and local authority finances.

I feel it will be useful to evaluate the denominator used for unemployment rate, i.e., the total number of workers offering themselves for work. Data suggests that labor force participation rate remains 3 percentage points lower than before the crisis and part-time employment remains high. A whole generation of labor might have become redundant in past 7years due to technology advancement and closure of many traditional businesses. These people may now be dependant on the State for their food and healthcare. Some of them might take up petty part-time jobs. But this does not restore their purchasing power to pre-crisis level.

Similarly, while talking about the growth rate of Indian economy, most discussions and arguments are focused on the rate of real GDP growth over previous corresponding period.

This growth number certainly has a statistical importance. But for most of the people, including me, the more important number is the absolute amount of per capita real national income in general and my actual real income in particular.

This real GDP growth in percentage terms will have little meaning if the base or the denominator is very low (which is the case at present) or it is not adjusted for the population growth or the real household inflation. A 5% real GDP growth with 2% population growth would mean just 3% growth in per capita income. This is not likely to cause any material improvement in my lifestyle. Especially when it is deflated by WPI and not the household inflation.

The denominator in our case, viz., population, household inflation and lower number for previous periods are too powerful for the official 6% real GDP growth to have any material impact on my lifestyle. Politicians and corporate though may have a reason to cheer!

Thursday, October 9, 2014

It's windy, wet and depressing out there

Thought for the day

”All generalizations are false, including this one."

- Mark Twain (American, 1835-1910)

Word for the day

Foremost (Adj, Adv)

First in place, order, rank, etc.

(Source: Dictionary.com)

Teaser for the day

Lalu Prasad Yadav was given bail after 10months. So may be the case with J. Jayalalithaa.

So what is the law here?

Should we have a definite law for bail in different cases, or it should continue to be a matter of discretion of the presiding judge?

It's windy, wet and depressing out there

The weather in global markets has suddenly turned grey. The sunshine has disappeared. It's all windy and wet out there. The chill is not biting yet.

The Absolute Return Letter for the month of October puts the mood succinctly, and I take liberty to quote - "When I look at the world passing by outside my window, there is little doubt in my mind that the world is not as safe today as it was six months ago. For starters we have just had a very important referendum in Scotland. We now know the outcome but not yet the full implications. In about 3 years – unless Labour regains

the control of the UK parliament – we will have an even more important referendum in the UK (more important economically if not emotionally) on the future relationship between the UK and the EU.

In the meantime, Putin and his cronies have played a very dangerous game in Ukraine. This is his third war, following armed conflicts with both Chechnya and Georgia, and the signs are that he is not going to walk away quietly. Even without Putin’s (outright) involvement, we have armed conflicts and new terror threats in many countries at present. Libya, Syria, Iraq, Sudan and Israel/Palestine to name a few.

In Europe, the economic recovery is limited to a handful of countries and the ECB has been forced to not only prolong but also intensify its de facto QE programme. The European powerhouse of yesteryear, Germany, looks surprisingly vulnerable and Italy is not in a good state either. The combination of almost zero inflation and high national debt, as in the case of Italy, is a bad one."

Many other are echoing the same sentiments. Some like Stephen King even going to the extent of calling the situation akin to 1984 where war was a constant thing.

Analysts at Brookings find that "The economic recovery in many advanced economies is stalling and growth in emerging markets seems to be losing its momentum, according to the latest TIGER (Tracking Indexes for the Global Economic Recovery) update. The U.S. is now the sole major economy still showing signs of strength."

The latest release of TIGER (Brookings-FT Tracking Indices for the Global Economic Recovery) paints a grim picture. The world economy is in a parlous state, with just a couple of bright spots discernible through the gloom.

The global economic recovery has stalled and become unbalanced, with the U.S. now the sole major economy still showing signs of strength. Growth in China and many other major emerging markets seems to be losing momentum. The world economy is now being powered along essentially by one engine, with the U.S. business cycle at least temporarily delinking from the rest of the world. (read more detail here)

Indian economy has shown signs of stability, though at a much below potential level of growth. Accordingly, this oasis has received significant attention from the yield hungry global investors.

The mute point is could India and US sustain their outperformance in a world that is under serious turmoil? If yes, for how long? I will discuss this in more detail later.

Wednesday, October 8, 2014

My "truth" not the same as yours

Thought for the day

”To succeed in life, you need two things: ignorance and confidence."

- Mark Twain (American, 1835-1910)

Word for the day

Supplant (trn verb)

To take the place of (another), especially through intrigue or underhanded tactics; as, a rival supplants another.

(Source: Dictionary.com)

Teaser for the day

Congress in catch-22 over the issue "whether it carries a national legacy or its legacy is limited to the Party itself."

If Gandhi, Nehru, Patel, Azad were national leaders then any Indian can claim their legacy. If they were just Congress leaders, what legacy is there to claim?

My "truth" not the same as yours

I believe this world is like a prism. You see different pictures, colors and hues depending upon from which angle you are viewing the world and in what light you are viewing. Therefore, while all views and colors are equally valid, your "truth" is always what you see from the point you are standing at a given point in time and under the current light.

In past few years inflation has been the driving force of RBI's monetary policy. Both Gov. Subba Rao and Gov. Raghuram Rajan have consistently emphasized on perils of higher inflation. In his recent statements Gov. Rajan appeared very firm and committed in his fight against inflation.

I spoke to 10 people from various sections of society yesterday to understand how inflation affects their lives. To my surprise, all of them had different perception about inflation. Certainly they all view the issue from their own angle and under the light of their own circumstances.

My problem is under such conditions what is the relevance of RBI's fight against inflation? From my interaction with people and experience of travelling across the country I understand that through tight monetary policy only a small part of the problem could be handled. The development, fiscal, monetary authorities may need to work in tandem to provide a holistic solution to stabilize the prices. The following are the few pertinent points to consider in this context.

(a) For almost half the population, primarily living in rural areas, food inflation may not be a matter of serious concern. This section mostly survives on grain based nutrition and obtains their staple ration through PDS or sustenance farming. Healthcare, agri input, and to some extent transportation inflation is a matter of serious concern for them. Effective implementation of food security, better connectivity, drinking water, sanitation and primary healthcare close to home would provide material comfort to this section of the society.

(b) Urban, semi-urban households suffer from a variety of inflation. Prominent amongst these are education, health, energy, transportation, communication, rental, protein, fruit and vegetable. The political rhetoric and central banker's focus exclude many of these critical elements in their fight against inflation. Better public health, education and transport services, energy efficiency, affordable housing, and better employment opportunities closer to home would be a more suitable solution here.

(c) Debt laden infra and realty developers are more concerned with inflated cost of capital and wage inflation. Energy and transportation cost also bothers them. Better execution standards, simpler administrative procedures, automation, good corporate governance structure, stricter compliance norms and vibrant retail debt market could alleviate many problems for this sector.

We need to appreciate that maintaining the negative real rates for households (household inflation minus term deposit rate) for a long period is the biggest scam perpetrated on the poor people of this country. The inflation tax, as I call it, paid by poor and middle class savers for cheaper financing of “crony socialism” and unscrupulous businessmen, has after all caused serious damage to the basic fundamentals of the Indian economy.

Tuesday, October 7, 2014

Some catching up

Thought for the day

”It is better to keep your mouth closed and let people think you are a fool than to open it and remove all doubt."

- Mark Twain (American, 1835-1910)

Word for the day

Stoic (n)

Not affected by passion; indifferent to pleasure or pain, joy or grief.

(Source: Dictionary.com)

Teaser for the day

Should the government enforce a mandatory "Annual Cleanliness Certification" for all residential areas (urban and rural). All elected representatives (Corporator/Panchayat member, MLA, MP etc, of the areas should be collectively responsible for obtaining the certificate from the "National Cleanliness Authority of India".

Some catching up

After having a great holiday in panoramic Himachal Pradesh, I am back to work. I have spent past two days catching up with the events of past ten days. It appears to me that last week was quite eventful in terms of news flow. Though I could not find little material that about which I can say authentically that "I missed it", there are few things worth taking note of.

In particular I find the following event noteworthy as these could have long term impact on general economic environment of the country and therefore may influence the investment strategy.

(a) Law of the land caught up with the mighty Ms. J. Jayalalithaa. She is the third tall leader after Lalu Prasad Yadav and O. P. Chautala to have been sentenced in a corruption case. Though Mr. Chautala has shown brazen contempt for the law last week, I am sure he will regret it, much like Sahara group chief Subrata Roy, in days to come.

(b) The prime minister Narendra Modi made most of his elusive US VISA by staging a grand show at famous Madison Square Garden of New York city. A typical Indian shown organized by the local Indian community seems to have impressed many US lawmakers. May be many of them will want to emulate Modi's campaigning style for their forthcoming elections. PM also seems to have promised a lot to global businessmen in terms of the quality and length of "Red Carpet" waiting for them on Indian shores.

I guess they take some time in formulating their fresh India plans. A hurried visit may compound their disappointment.

(c) After Sardar Patel, BJP and RSS have sought to appropriate legacy of Mahatma Gandhi. This is an auspicious sign for the socio-economic structure of the country. I have been advocating since long that salvation for Indian economy lies only in Gandhian economic thoughts. (For example, see here).

Besides, the attempt to mainstream RSS is also approvable. In my view, it is akin to listing of a PSU. The board who is used to work in surreptitious ways, suddenly becomes transparent and accountable to public and open to media scrutiny. The content of the supremo Mohan Bhagwat's RSS establishment day's speech only advocated secularism, tolerance, nationalism and inclusiveness.

(d) The PM Modi made yet another serious attempt to move up the political ladder. Rising above the image of a protagonist of free market and business interests, he sought to don the robe of a Lok Nayak. A success in this endeavor could potentially accelerate India's socio-economic development exponentially.

(e) Hong Kong students scared the mighty Chinese regime by putting up a spirited demonstration. In my view, we shall see far reaching impact of this resistance on Chinese administrative and governance structure.

(f) Commodities' world witnessed turmoil with oil, metals, food, rubber all taking a serious plunge. Equities corrected slightly, while USD surged.

At the end I would advice tourists to Himachal Pradesh to avoid Shimla, a city having 1000x more people & vehicles than it is designed to handle.