Category Archives: Business

Unjust retribution

Just as the Indian Govt. had placed a ban on commodities futures to control inflation, so has the US SEC [Securities and Exchange Commission] directed a ban on short selling on about 800 financial companies in a bid to arrest the deep slide faced by financial institutions in the US in the wake of the subprime mortgage crises.

Just goes to show how unfairly the only people in the world, who saw the bubble in the valuations getting built, get treated. While the executives who directed the funds to such fraudulent instruments walk away unscathed [at least financially] and the credit rating agencies which failed to mark the assets suspect remain ignored, the only guys who saw the true fundamentals [or the lack of them thereof] get blamed for the sorry state of the economics. What a shame and pity.

Ayn Rand vs Che Guevara

The past weekend, i completed a relatively unique double of reading through two distinct texts with strong communist influences; The Motorcycle Diaries and Animal Farm. The former recounts the journey carried out by Ernesto Che Guevara accompanied by his friend, Alberto Granada aboard ‘la Poderosa’ while the latter describes the Orwellian tale of an uprising staged by animals of various “classes” in a farm in England in hope of better living conditions.

While “The Motorcycle Diaries” chronicles the formative years of Che’s eventual revolutionary life, these very influences are presented in a very subtle manner wherein Che encounters deep class, societal, cultural and economic divides in his travels across Latin America while he himself battles tough medical and economic conditions. What essentially starts of as a humourous series of thoughts and situational anectodes penned down by Che towards the start of the journey eventually transcends into a soulful recording of the punishing conditions the native Latin Americans are subject to in their own lands. All this, while Che manages to keep the humourous thread running and at the same time, provide a poetic narrative of the mystic and enchanting lands that he visits as a part of his expedition. That the text might be called ‘Motorcycle Diaries’ while ‘la Poderosa’ gave up less that halfway through might appear strange. That is an academic anomaly in an otherwise thoroughly enjoyable book that does not give much of a scope for one to crib through.

In addition to these texts carrying deep socialist undercurrents, i have also had the privilege of reading throught the thoughts of one of the faces of capitalist societies: Ayn Rand. And the distinctions between the two are pretty easy to see. Reading through Ayn Rand’s Atlas Shrugged had left a lasting impact on my thoughts at that time and it was very difficult for me to think in any other terms other than those propounded by those in Ayn Rand’s utopian world. And in hindsight, i must admit that they tend to be quite damaging, especially given today’s glocalization and mass movement of economies world wide to a democratic setup. Ayn Rand’s societies consisted of few men [and women, yes ok!] of strong virtues pitted against a mass society that tended to be parasitic in nature. And this corruption of character manifested itself not solely in individuals in trade but also those who practiced and created art. And her argument against the corruption of such societies was to revolt against them through non-cooperation. And in this manner, it had a very Gandhian edge to the revolt. But while the Gandhian way of life talked about reformation of the instigator, Ayn Rand preferred to profess destruction of the corrupt society in the absence of the ‘prime movers’ of the world.

But coming back to why i felt this outlook could now present damaging consequences, the basic fault lies in the very utopian society created by Ayn Rand herself. The only parameter against which an individual was judged was by his/her virtues to individualism while leaving out a number of very pertinent factors [which are prevalent today] like culture, historical class bias and education. And these are the very factors [or biases] that caused Che to eventually don the revolutionary streak.

History has been witness to the vast social injustice inflicted upon various races by colonialism ranging from suppression to mass extermination of races. These consequences of colonialism are most apparent in some of the most troubled of states today like African states of Zimbabwe and South Africa, contensted territory like Kashmir and vast colonization of Australia by European colonists after mass extermination of native populace.

This note is not meant to serve as a treatise against colonialism; what i am trying to convey is that Ayn Rand’s vision of the world was extremely lopsided and could not account for a number of factors that would eventually present themselves to the global polity and economy in the times to come. And with the divides across the world today brought down to their knees by equalizers like the Internet, free trade and consumerist culture, Ayn Rand’s vision of individualism reeks of a defeatist attitude that would not do the world any good.

The world economy today needs new consumers and new markets. The success of an individual today depends upon another individual halfway across the world; the failure of one also brings down another equally antipodal. So the essential need to is general upliftment of peoples across the world, making them contributors to the world rather than subjects of charity and building a local market thus perpetrating general good. And in this, Che’s vision of upliftment of the suppressed classes makes more sense that Ayn Rand’s vision of their destruction.

Hungry kya?

George Dubya Bush has often been credited with having made political statements that have lacked either intellectual depth or logical sense or, as in most cases, both. Hence, it came as no surprise that when he, in the recent past, made a political statement, and this time concerning India, he was again criticized from all corners and this time, including India.

While Dubya was primarily defending his decision to use food grains like maize for the production of bio-fuels like ethanol, the additional point he was trying to put across was that rising per-capita income levels in emerging markets like India and China had given rise to additional demand to quality food grains from that segment of the population. And while he should be kicked in the rear for converting edible foodgrains in fuels, he is quite right when he says that India and China are contributing in a large way to the global food crisis.

Closer home, its not just rising demand from the burgeoning middle class that is sole contributor to rising food costs; studies have shown that per capita food production has fallen to the 1970s levels. That is, indeed, an alarming statistic and what is even more incredulous is the fact that the downtrend is not an overnight turn of events; the stagnation in the agricultural sector has been prevalent for the better part of the decade. That is a sorry tale to say of a country that still boasts to be agrarian and whose populace is largely deemed to be dependent on the farming sector. So what caused this dramatic turn around?

Since the very nature of the issue forms a vicious circle, it is impossible to point out just a couple of factors. The primary reason for the fall is the lack of irrigation water supplies at grassroots level available to farmers and the ill use to technology to aid in crop yields. As a result, farmers have to depend on erratic monsoons and age old techniques to boost crop yields. Bonanza schemes like loan waivers end up being zilch down the road since the basic problem still exists; the only effect of such schemes is to worsen the fiscal deficit.

Down the road, further problems arise due to the sales from the yields. The Govt. of India is the largest buyer of the food grains from these farmers and the price is, of course, dictated by the Govt. Termed MSP [Minimum Support Price], these prices are usually lower than global market prices [though, they are revised every year]. The differential between MSP and the global prices deny the farmers the true market worth for their grains. Their problems are also compounded by the restriction on exports of essential food grains like rice and pulses. In such a situation, most farmers reserve vast tracts of their land for the production of cash crops like rubber, sugar cane etc., the prices of which are entirely market driven and have no export restrictions.

It only needs to put two and two together to understand this does not foster a positive enviroment for a farmer; however, incredibly the problems do not end there. The food grains procured by the Govt. is distributed by an archaic channel called PDS [Public Distribution System]. While PDS incredibly suffers from manpower concerns [due to migration of unskilled labourers to cities aided by opportunities in real estate sector] for acts as simple as loading and unloading of foodgrains, the actual problems start once these foodgrains are collected into the distribution warehouses. After the foodgrains pass through various levels of rampant corruption, the supplies lying around in the warehouses are subjected to waste by the single largest consumer of foodgrains: rodents!

With limited supply from farmers and a pathetic system to distribute whatever little does get filtered through, its no wonder that inflation is climbing to double digits. Artificial counter measures like tightening exports and banning futures trading on commodities serve no purpose than to artificially set prices to hold down inflation. These, in turn, causes an imbalance in the global markets since supply from India is minimal; most countries have used this approach to contain inflation as a result of which globally prices have increased.

Hence, you would now assume that the fault does not lie at the doorstep of the United States. Of course it does. The most important factor in all this is the suddenness in the rise of prices globally; that cannot be the fault of India’s archaic PDS. That is due to the weakness of the dollar against all other currencies.

The dollar is weak because the US Federal Reserve has been relaxing interest rates over the last few months; this makes investing in other countries with higher interest rates more attractive. Which in turn infuses a larger supply of the greenbacks versus the local currency, hence devaluing the dollar.

And why is the Federal Reserve reducing interest rates? Try searching for sub prime.

Renewed vigour on visual search

Image search has got to be the obligatory burden that search engines need to carry around. In spite of the equally vast amount of spidering required, all that any self-respecting search engine can show are bare images strewn around, hopefully relevant. There seems to be absolutely no incentive for any service to throw up a decent set of image search results because in its native form, it is absolutely non-monetizable unlike its richer cousins like text or even other multimedia like audio and video.

Given that, the image search landscape was, by and large, filled with the big search players like Google and Yahoo! which indexed images by names and then threw out the best possible results. The primary incentive to serve relevant results was to siphon off most of these users to the more lucrative search categories and hence, gain a significant overall market share. Yahoo! went one up recently by exposing the vast database of images it possesses via Flickr as search results. Since the images are geo-tagged and presents readily relevant and indexed data, it was a natural progression to make them available as search results. Incentives as a result of this measure were added volumes in user engagement [capturing the user and his/her immediate social network via forwarding] and hence, a higher probability of the user conversions to signups for Flickr premium services.

The landscape, surprisingly, has seen mushrooming of a new set of players [like Polar Rose, Riya, Picitup] who base search results upon radically different approaches. A definite advantage these players enjoy is that these ventures are centered wholly around image based search and hence, their economics [or lack thereof] are not the same as those involving the traditional search engines. These services use the cheap availability of massive compute power to process images to determine patterns within them as against name/tag based approaches.

It goes without saying that relevance is of utmost importance; however, even bigger problems exist in terms of content and monetization. To counter that Polar Rose, being primarily centered around people based search, have introduced a Firefox plugin that helps bridge the content and relevance gap. The plugin scans the images loaded per page for human-colorized regions [much smarter of course] achieving near 100% accuracy in identifying faces in the image. That done, the plugin allows the user to tag the person as someone recognizable and the relevance is improved when that image is tagged again by someone else. Relevant results then get shown in the search results page. Overall, a healthy cycle that only allows better content and relevance as time goes by.

Riya has been around for some time and have recently introduced that aims to target shoppers who are visually attracted to certain products and on that basis, suggest similar products that might also appeal to the user. Tie-ups with small retailers and seeking a margin from the sales being driven by the visual search engine is, essentially, the revenue model being adopted by the venture. It remains to be seen how successful this turns out to be and how far it affects the profitability of the visual search space.

Picitup, meanwhile, is a late entrant in this field and employs a rather strange method of sourcing images, as explained in the Techcrunch article and which i have borrowed from below

An image search on Picitup begins with a textual search actually queried on Google or Yahoo. Picitup will display a set of results only from one of the two—the basis of the decision is the speed and quality of the results. The user can then select which image Picitup should fetch similar images for, or filter the results by Faces, Products, Landscapes and Color. The analysis is made in real time and is based on 100+ parameters including a propriety color space the company developed.

All said and done, its promising to see a number of players in the visual search space pitted against the traditional biggies and it would be interesting to see how the space pans out in the market share front. Picitup, as an initial arrangement towards that very goal, has introduced a celebrity match service that matches the facial impression of an uploaded image with those of celebrities and returns back those that match with an acceptable level of accuracy.


  • Polar Rose as a facial recognition engine has been discontinued and has since been acquired by Apple.
  • and have discontinued their services and have since been acquired by Google.
  • Picitup has since diversified to allow retailers bridge gap between online and offline shoppers by offering image based visual search as a platform to help find products.