For the past few years, a huge business is being run in the name of Indian Culture and Hindu Culture . Their representations on Indian/Hindu culture is both absurd and annoying.These sene’s consider Valentine day celebration to be against Hindu belief, thus against India’s ethos, as if India is only about Hindus! Valentine’s day on Feb 14th is part of a Christian belief system, of celebrating one of their saints St. Valentine. And Christianity is certainly one of the main Indian religions. Indians do Celebrate Christmas, and we do have a holiday on that day – don’t we? So much for Valentine’s day not being part of Indian culture.

So, their argument will come down to – couples courting each other before marriage is not part of Hindu Culture.  This argument too does not stand the test of reason, when we look at our heritage from the prism of literature.

The native name of India is Bharata. This nation is named after its founder King Bharata, who started the Bharata dynasty of Mahabharat. Bharata in Sanskrit means “one who is engaged in search for knowledge” or someone who gains and maintains knowledge.He was born to Dushyanta and Shakuntala, out of a wed lock (What was then called a Gandharva Vivaha – an approximate equivalent of eloped – Love Marriage). They did not seek the blessings of their parents, neither inform anyone else. They had a brief courtship, accepted each other and went and had the baby, and Dushyanta returned to his palace – forgot about Shakuntala (due to a curse) and refused to accept Bharata as his son! Finally, everything is sorted out, Dushyanta accepts Bharata and Bharata went on to become a great emperor who founded the Country now called India.Here is the Family tree of Bharata.

Family tree of Bharata

There is a parallel line of the Great Rishi (sage) Vasista, which has a interplay with the family line of Bharata. It starts with Rishi Parashar, who is Grandson of Vasista.

Satyavati, who before her marriage to Shantanu (Great Grad son of Bharata), used to help her foster dad, who was a boatman, who made a living ferrying people across the river Yamuna. Once Parashar was being ferried by Satyavati across Yamuna. Parashar fell to the charms of Satyavati, and wanted to make love to her. Parashara told her that she was destined to give birth to a very great person from this liaison. After some pursuation and agreeing to the conditions Satyavati put, they did unite (Without even the pretext of Gandharva Vivaha) , and a son was born of that union. He was named Vyasa, who wrote the Mahabharat and some texts even credit Vedas to him! Whichever way you want to turn the argument, Vyasa will be an illegitimate child born out of a relation that doesn’t have a name, but that is not how Hindu’s treat him. He is accepted as a great scholar and Saint.

Let us understand the concept of “Gandharva Vivaha”, which is what led to the birth of Bharata. It is nothing but a union of two adults by their own consent, without anyone elses blessings! It was an accepted form of Marriage in Indian Customs more than 3500 years ago!!We should be proud  of our heritage.

Hinduism is a great religion that permitted every belief system and every philosophy, because they are also part of the knowledge. For example, The Cārvāka system named after the author of Brahaspataya Sutra, is one such philosophy that’s part of Hindu Belief, where the atheism (Nastika) is an integral part. The jainism and Buddism are classified under this thought system.In a democratic republic, such as India, everyone is free to follow their religion & faith and a chosen lifestyle, as long as it does not impinge on the freedom of another individual to lead their life peacefully.

What the various Senes (Militias) around India are doing is nothing but denial of such liberty. Their fundamental claims to represent Hindu belief system doesn’t stand the test of logical reasoning (Tarka Shastra) – which is what the great revivalist of Hindu religion – Adi Shankaracharya – followed to convince his opponents of his Advaita philosophy.

The leaders of these militia’s are nothing but crude, lumpen and out of control mafias. The political parties and leaders who support them do not certainly understand or represent the Hindu Philosophy – for their reasoning doesn’t have the foundation of Logic.

Science is a Latin word for ‘Knowledge’. It can’t be a coincidence that Bharata means the one who Maintains  the ‘knowledge’.

So, quest of Science (Knowledge), which is derived out of Logic, is our true culture. It is the very meaning of our country’s name.

One of the advantages of aging is that it gives you a perspective on life that’s very difficult to gain any other way. My 23 years of work life  gives me some idea of life and the industry you are associated with.

Here is one of the things that should amaze us. US is said to be in a severe recession. But, the unemployment percentage in US is hardly up by about 3 basis points from the peak of the boom. Unemployment in Jun 2007 was 4.6% and Jan 2009 is 7.6%. Ref:http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest_numbers&series_id=LNS14000000

Corollary of this is  – 92.4% of USA workforce is still employed as on Jan 2009, as versus 95.4% in Jun 2007.  Does this look very bad?? Why should there be massive slowdown in consumer purchases, when more than 92% of the people are still employed and are earning?

It has everything to do with the moods and cycles. There will be a boom leading to a bubble, which will burst leading to a gloom. The reason for the Boom-gloom cycle is easy to explain.

From a layman’s economic perspective, the amount of money that is available doesn’t change drastically between Boom and Gloom cycle. Govt’s across the world print the money according to a plan. So, in 2007, when the world economy peaked, world didn’t have much more printed money than today. So, why is there a liquidity crunch today and not in 2007?

It all has everything to do with the Spending cycles, rather than the amount of money available.
Here is how it goes:

1. Companies consider the market opportunities and bring out products and services. As the products become more desirable to people, companies find more people wanting those products (Growth Opportunity/Potential market).
2. Companies determine, through surveys and other statistical mechanisms, the kind of growth they can have for their products and services. On growth projections they get valued higher in the market. On the basis anticipated growth, they decide to employ more people.
3. This is where the up-turn begins. More people get employed, more confidence they have on spending and they will go buy those products/services they always wanted to buy. This fulfills the growth projections made by most companies.
4. Now, here is where the Bubble comes-in!  Companies start thinking they are doing something wonderful, so they will keep growing at the same phase. So, they make even higher projections of growth (and market data supports them too!). The stock-markets reward them with valuations that are heady. They go and hire even more folks. Everyone has employment, everyone has money to spend, a bubble gets created where all assets become expensive. Since everyone gets convinced of their future income, they go borrow the money to buy things that on cash they can’t buy.
5. This goes on in a pattern of a Ponzi scheme, where people go on discounting their future income to buy things today. At somepoint, the pyramid breaks as someone in the chain sees through it. Typically, it is the government, which calls the economy overheated and increases the interest rate and making it difficult for people to borrow the money against their future income.
6. All of a sudden the projections made by the companies don’t look real anymore. They refactor and decide they don’t need higher employees afterall. They stop hiring, and some start to lay-off.
7. This is the begining of the Gloom cycle. The confidence of people about their future cashflow is dented, they buy less and hold on to the money. The projections of the companies on their sales, is hurt even further, they reduce expenses and let go of even more people. This cycle continues till a point is reached, where the business reflects the purchasing power with real-money (as versus purchasing power of the virtual money/assets built by discounting the future income).
8. That is the point of equilibrium and ideally the world should stay there with moderate growth. But it won’t!! People still want to buy those things currently they can’t afford with the money on their hands. Even the guys who don’t have employment have needs/wants. This is where govt’s step in and do something. They reduce the interest rates, raise public debt (thru bonds) or even print money and spend a lot of it on infrastructure or bail-outs, in the name of ’stimulating’ the economy. Making it easy to borrow or get money. This is the oil that makes it possible for the economic machine keep going forward.
9. Slowly, People who never lost jobs/income realize they are holding off on their purchases without any rational reason! They go out and slowly start buying things.
10. All of a sudden we are at Step-1 all over again.

So, I believe even as we are reaching the end of the bust cycle, the next boom and bublle is just being created!! The world rarely remains static. While lot of economists debate about the stagflationt hat Japan experienced in 1990s, that’s just one country. The world on the whole can’t remain static.

So, I firmly believe that in about couple of quarters from now, the next bubble would be on its way.

Our ancestors, depending on an agrarian economy, had passed down some wisdom through the generations, which is largely lost on the modern world with modern non-agrarian economy.

Some of things I have heard about the ancient wisdom (Told by my elders):

1. Do not spend/waste everything you receive – They said it isn’t how much of Ghee (clarified butter) that goes through your hand that matters, it is how much that sticks to your hand that is of help to you, as that’s all you can take to your mouth. In other words, it doesn’t matter how much you earned and spent, it is only the amount you saved that matters.

In modern times, it is essential to save at least about 20% of your monthly income. This savings should be in addition to the Mortgage payments and Mandatory Retirement savings (PF, Superannuation etc).

2. Prepare for Crop Failure: Every once in a few years there will be a year or two where the crop will fail. It could be because of failure of Monsoon or some disease. If you aren’t prepared for it, you’ll go hungry. It doesn’t matter how big a property/assets you have, if you have not saved atleast a year’s worth of harvest for a bad year, you’ll fall on hard times.

In modern times, employed/Business folks put in their effort to reap the harvest in terms of their salary/profit. It is only the natural scheme of things that some time the harvest will fail for a while. The intelligent thing to do is to prepare for those days by keeping some buffer amounts to take care of bad days. Ideally 6 months to an year’s living expenses should be in liquid funds.

3. Size your House right: The house you choose to build should not cost more than 2years worth of household produce. If you can’t afford to build it within that, then wait for a day when you can afford to.

In modern time: the above rule can be modified slightly. These are days of high inflation and higher income growth. So, I think a fair measure would be to take your current net income (post tax), and plan to spend about 3 times of that for your house. So, if you have an income of about Rs.600,000 post tax income per year, the right amount to spend on a house is about Rs.18,00,000. Anything more is stretching yourself, and discounting your future cash-flow heavily. A certain recipe for landing yourself in trouble.

4. Be careful while borrowing money : Never borrow money, unless it is for buying and improving the land that gives you the income. The money you borrow should be repayable over a period of time, with the produce created by the deployment of the money. In olden days of low inflation, and repeated crop failures, people dreaded loans, and avoided it like plague.

In our times – In a career spanning about 25-35 years, one may go without much income for 2-3 years in the middle. So, the situation today is much better than the olden days of frequent crop failures (in a time span of 35 years, you’d could have 5-7 crop failures. Considering this, borrowing money today has become easier. Considering the higher inflation, loans have become desirable. However, there has to be prudence. One shouldn’t borrow more than what he can’t pay back within 7 years, with 30% of his income.

5. Hasige Iddhaste Kalu Chachu: Literally means – Spread your legs only as much as the bed permits. Do not overspend. If you are spending money by borrowing (credit cards, personal loans), then there is certainly something wrong with your lifestyle. Your expendable income should be the portion that remains after you have paid all bills, mortgages, rations and savings (minimum 20%). if you have any money left after that, it can be used for other expenses like hotels, holidays etc.

A lot of people have lost their jobs in the past month, in most cases not for any mistake of their own. There are valuable life lessons on offer, for everyone to takeaway:

• Never take the current state of affairs to be perpetual
• Never take people for granted
• Never think something bad won’t happen to you
• Be always prepared for the worst in good times, and do not loose hope of better days in Bad times.
• Work is something you do for your life, it isn’t life itself.
• Always have good support system in place. Friends/Family to lighten your burden. They are your true assets.

I see many young people caught in a vortex of mortgage payments that they can’t keep up. In India, a cabal of politicians and real-estate mafia ran up a madness where real-estate prices raised by 10-12 times for land and almost 3-4times for built-up space. Lot of people discounted their future cashflow, and mortgaged it with banks. Banks lent an unhealthy 80-90% of the value of property (in some cases above 100%!).Young people, barely into their careers, made decisions to go into mortgages, which took away half their salaries. They didn’t have anything else to fall back on, other than hope of perpetual income.Here is what they should never have done:

• Choosing a house that is too expensive for their income. The house shouldn’t cost more than your 2-3 year income.
• Taking on a loan that is larger than prudent. If you can’t pay 50% of the house cost, then wait till you can.
• Putting all their eggs into one basket – House. We ought to Balance our portfolio. If all the money you can save  is enough to meet your mortgage, then you’ll be in trouble sometime or the other.
• Buying Cars that suck up more than 5% of their monthly take home.

If these lessons are imbibed then this crisis would’ve been of some use.

We are passing through one of the most difficult economic times in world history. This perhaps is the worst economic crisis most of us will witness.  Overall sentiments are bad, and many are loosing their jobs.In times like this it is important to remember that life does hand us a lemon every now and then. It is important for us to handle it  well and bounce back in life.For all those who despair and feel hopeless about their situation, here is an inspirational video :

http://in.youtube.com/watch?v=v4uG2kSdd-4

From experience I can confidently state that the ongoing worldwide crisis too will be a blip on the radar when you look back at it from a whole life context. It seems bad now, but human ingenuity is such that we will find a way out fairly soon.This is not a tragedy as some are making it out to be. Lets put it in context:

• The Black Death (bubonic plague) in 1300s, killed close to 50% of Europe’s population, and Europe bounced back within a hundred years to start ruling most of the planet.
• Great Famine of 1876-77 in India killed about 5.5million people.
• Days following our independence were calamitous in every sense.
• World war’s created a far worse situation than anything we have experienced in our life time.

In all – I think most of us who are accessing Internet have led a favorable life. Things have improved constantly.Periodic corrections and dips shouldn’t cause us to loose hope entirely. We just need to factor it into our future plans and move on.As they say “You got a Lemon? Make Lemonade”.