Economagics

=========================================================

Maugham: "Think again before renouncing money...a decent bank balance will let you ask anyone you don't like to go to Hell"

Larry: "I don't think I would ask anyone to go to Hell....and if I did, the lack of a bank balance wouldn't prevent me....."


.........Razor's Edge......from poor memory..............

******************************************************************************

As I said a hundred times by now, Money simply baffles me...I just don't get the hang of it. Everything about it is a mystery. So I have a terrific inferiority complex with anyone talking knowingly about money.

The other day my autowallah held forth for ten good minutes on the relative merits of renting an auto vs buying one: cost, depreciation, maintenance, resale value, spare parts, insurance, inflation, fiscal responsibility so on and so forth. It was all high finance for me.

Having never produced anything tangible and always lived like a parasite on the Public, this ignorance also gives me a guilty conscience; but try as I might to follow the ups and downs of Sensex, Mutual Funds, Equities, Balance Sheets, Takeovers and such Mumbo-Jumbo, I failed miserably.

I give up! It is too late in the Day...old dog & new tricks...

We had an Eminent Sardarjee Teacher MSS at IIT KGP. I learned all my Bread 'n' Butter Physics from him; he was 15 years my senior so I had no shame to surrender my ego to him. And hence perhaps no one else in our Department benefited as much as I did from his keen insights.

My Ph D Guide SDM used to call MSS The Lower Court and himself The Higher Court. In the Farewell Function of MSS I referred to this and said I had the unique privelege of attending both the Courts.

He never cared for a Ph D or promotions. Whenever I happened to meet him alone in the Canteen I would ask him: "Please tell me something". And he would happily talk about his latest intuition into the Basics of Physics.....as Feynman said in an altogether different context: "You have to ask".

Fed up with demands from his wife (as he told me) to earn money so that they can take care of their three daughters' responsibilities, he took up IIT JEE Coaching in his Qrs.

And Liquid Money flowed in such a Deluge that he stopped visiting the Bank for years to draw his salary; and my friends in the Bank used to tell me to ask MSS to withdraw some cash once in a while so that his Savings Account doesn't go dormant.

He used to ridicule the Bengali kiptey-money-mindset saying things like:

"You can't make money by saving....you have to EARN it"

"You look for Service...We look for Servants"

*************************************************************************

And then an out-and-out Bengali kid christened Amartya (Immortal) by Tagore himself at Santiniketan goes on to win the Nobel Prize in Economics of all things!

Trust Bengalis to pull stunners out of their hats every once in a while.

But don't expect Bengal to change its Economic Philosophy just because one of their kids won a Nobel....Bengal has its own illogical logic of Progress...Their longest-serving Chief Minister of any State in India, Jyoti Basu, who was inspired by Harold Laski and Rajni Palme Datt had to yield to his Party Discipline and permit what he called their Himalayan Blunder of not accepting the Prime Ministership which was for asking at one time.

*************************************************************************

Reverting to the Nobel Prize for Economics, it was not established by Alfred Nobel and so can't be derided as Alfred Nobel's An-Other Mistake by Feynman fans. Alfred Nobel can't be blamed for terming it: Nobel Memorial Prize in Economic Sciences.

"Economic Sciences"; eh?

*******************************************************************************

".....In his speech at the 1974 Nobel Banquet Friedrich Hayek stated that if he had been consulted whether to establish a Nobel Prize in economics he would "have decidedly advised against it"^[23][26] primarily because "the Nobel Prize confers on an individual an authority which in economics no man ought to possess... This does not matter in the natural sciences. Here the influence exercised by an individual is chiefly an influence on his fellow experts; and they will soon cut him down to size if he exceeds his competence. But the influence of the economist that mainly matters is an influence over laymen: politicians, journalists, civil servants and the public generally."^[26]............http://en.wikipedia.org/wiki/Nobel_Memorial_Prize_in_Economic_Sciences

**************************************************************************

Suppose some Russian discovers a new type of Radiation in his Physics Lab and announces it. Within days a hundred people at a hundred labs all over the world confirm it.

And then it takes 20 long years for him to get a Nobel in Physics.

Not so in Economics: one (or two) may announce their latest technique of predicting the ups and downs of the Stock Market. He (They) may get their Economic Sciences Nobel the very next year; and everyone who follows their technique may go broke the next but one year...and the Nobel is not likely to be retracted or surrendered.....a hypothetical situation...

**************************************************************************

Coming down to home truths, I always thought, as a salaried man, that the Ideal Economy would be one in which my salary goes up, up and up and the prices of everything go down, down and down.

But I am told there is some fallacy there...if salaries go up by a factor of 2, prices would go up by a factor of 3.

And when the Economy of our country was apparently going through a short phase of Stagflation if not Deflation (whatever they mean), Sensex tanking by a factor of 4, every Economist was worried; but I was not..the food prices were racing upwards...and food is all that matters to me; forget Gold; and Petrol whose Administered (Cooked-Up?) prices also raced upwards...

The whole thing is a mystery...

The only thing I can bet on is that:

(1) You can't win

(2) You can't break even

(3) You can't quit

http://gpsastry.blogspot.com/2010/06/thermodynamics-marital-bliss.html

***************************************************************************

My mother (88), who never had much money under her control (like myself), once said that the greatest invention of Mankind is: "Compound Interest".

And I always had trouble with its ugly formula in my Arithmetics (in school we had no logarithm tables, forget calculators).

The ugliness came from the way Interests are compounded: Yearly or Half-Yearly or Quarterly etc..

If only one can compound the Interest every moment, the formula would be the simplest of all Algebraic ones: what they call Exponential.

I am told that Bankers are now getting down to it and the Savings Bank Interests are now calculated on an every day basis, thanks to the Digital Computer (?).

****************************************************************************

All my gloom about my total inadequacy in Economics was dispelled last year when there was this huge Housing Bubble leading to the World-Wide Recession on the back of the failing of almost all US Investment Banks.

Apparently they trusted too much the wizardry of their geeks, most of whom were ex-Theoretical Physicists.

My blissful moment was when I read the wail of some of the Greatest Bankers in the World that they can no longer read their Bottom Lines (what about their Top Lines?) and had absolutely no idea where their Money vanished.

And they laid their blame squarely on their Theoretical Physics Employees.

As a Failed Experimental Physicist, I qualify eminently as a Theoretical Physicist and my Joy knew no bounds on reading this News Item.

Investment Bankers and Hedgehog Funders!!!

Economic Sciences, Eh?

http://gpsastry.blogspot.com/2010/10/arts-crafts.html



==========================================================