Can Money Simply Disappear?

In a recent comment Ashutoshg says:

You might have heard about 7bn$ fraud at Societe Generale in France. As news says, The guy who is responsible didn’t got rich because of the fraud. He just traded badly. Bank lost it and that guy didn’t make it then, where did this money go? Who got rich? Can money just disappear? Please explain.

Indeed, money can simply disappear without a trace. But first, let me tell you a story.
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The Resurrection of Gandhi

Arvind Lavakare in an article titled The Myth of Mahatma Gandhi notes that the Gandhi icon had been losing its sheen for years until the present government began giving it a nice new varnish. Maybe it is an attempt to “to fuse the original Gandhi image with the Italian one” he hints. I am convinced of that, however. Reading the comments on that article is instructive. Many of them are the equivalent of sticking one’s fingers in one’s ears and loudly repeating “I am not listening. nana nana nana.” If people who are literate and supposedly educated are brainwashed enough to not even entertain an argument supported by evidence, what hope is there for the vast majority who have no access to alternative viewpoints to ever recover from the effects of the constant barrage of images promoting Gandhi as the sole savior of India?

If I were an illiterate person, I would be convinced that Gandhi is goodness personified. After all, doesn’t Indian money carry his image? Isn’t he the father of the nation? And should I not vote for Gandhi’s children — Rajiv, Sonia, Rahul, whoever? And should I not vote for the party that Gandhi founded? And should I not believe everything from a person who says he is a Gandhian?

Anyway, I must admit that the Congress party of India has a winning formula and they know it. Gandhi is the biggest brand name in the world — forget Coca Cola and McDonalds. Mera Bharat Mahan!

Debunking Myths about China and India

Pranab Bardhan, a professor of mine at UC Berkeley, whom we have met before here (see Crouching Tiger, Lumbering Elephant, and Pranab Bardhan on the Indian Economy, for instance) has an excellent article in the Boston Review titled “What Makes a Miracle: Some myths about the Rise of China and India.” (Hat tip: Yuvaraj Galada.)

He states the standard view explaining the rapid growth of the two countries:

What explains this strikingly rapid growth? The answer that continues to dominate public discussion in the United States runs along the following lines: decades of socialist controls and regulations stifled enterprise in India and China and led them to a dead end. A mix of market reforms and global integration finally unleashed their entrepreneurial energies. As these giants shook off their “socialist slumber,” they entered the “flattened” playing field of global capitalism. The result has been high economic growth in both countries and correspondingly large declines in poverty.

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Rewriting Indian History: Book review by CJS Wallia

The following is a review of Francois Gautier’s Rewriting Indian History. (New Delhi: Vikas Publishing 1996). The reviewer is C J S Wallia who writes:

From my own perspective as a secular humanist, I believe that any whitewashing of historical record is counterproductive. No matter how lofty the ideals of a current cause, any whitewash of history tempts the fates. To forget history will always be fateful; to forgive its horrendous facts can be redemptive. Forgive — but never forget — history.

I, like the millions of others of my generation, grew up basically ignorant of Indian history as I had only been taught the Nehruvian pseudo-secular socialist government-sanctioned propaganda “history.” Now it is time that we free ourselves from the government brainwashing by reading alternative viewpoints critically. I bow deep in gratitude to the internet gods for allowing some light to shine through the darkness that Nehru imposed.

The review is continued below the fold.
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Sunday Silliness: West versus South Carolina

The following is a 1-minute video of a contestant in the Miss Teen USA 2007 contest. The video has been viewed around 22 million times on YouTube and accumulated over 65 thousand comments, and hundreds of video responses. Here’s Miss South Carolina attempting to answer a question which explores why many Americans are ignorant of basic geography:

Obviously she’s in the spotlight because she is pretty, and most certainly better looking than 99.99 percent of the population. But nature perhaps balances it out in her case by making her dumber than 90 percent of the population. It’s her beauty that brought a bit of fame, and her lack of brains that gave her a whole lot of notoriety. That’s the luck of the draw. And I suppose there’s a bit of envy of her looks that prompts the fun that one has in seeing her babble. But here’s a video response that has a very pretty face:

Clearly Miss West Carolina is not only very pretty but also articulate. And if she wrote the script as well, I say that she’s a pretty smart cookie. There’s a case of beauty and brains. I think Miss W Carolina is much much prettier than Miss South Carolina. (Miss South Carolina need not reach for her map to locate West Carolina on it.)

The 2008 Post on Sri Sri Ravi Shankar

Some readers have been asking, “Atanu, when will you write more about SSRS?” As luck would have it, I got an email from someone who has actually met the man. He wrote me a very nice email saying that he has read all the SSRS posts patiently and then proceeded to inform me that he disagrees with me. That is not the least surprising as I am sure that an overwhelming majority of people won’t agree with me on anything of substance. That’s because my point of view is different from that of the majority, and the difference in the point of view is the result of differing life experiences. I merely state my opinion and note the differences and move on. Differences are good because otherwise it would be rather boring if we all had the absolutely same opinion.

Anyway, here’s my response to the gentleman, for the record.
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The Stock Market

The other day, a BBC producer from London called me up and asked me if I would care to comment on the recent big sell-off in the Indian stock markets. I confessed that I am not fully qualified to do so but added that in all honesty that my guess would be as good as any one else’s. Still I declined. The best we can do is pull out Keynes’s “animal spirits,” which unfortunately is not amenable to rigorous scientific or economic analysis. The essential story of the stock market is well told in this cartoon.

That pretty much sums up how the stock market swings between fear and greed, the abrupt change from panic to irrational exuberance. And here are The Long Johns (John Bird and John Fortune) on turbulence in the financial markets. As one of the Johns so astutely observes, “You have to remember two things about the markets. One is, they are made up of very sharp and sophisticated people. These are the greatest brains in the world. The second thing you have to remember is that financial markets — to use the common word — are driven by sentiment.” I won’t spoil the fun for you. Just watch the video and fall off the chair laughing.

That’s why I don’t mess around in the stock market. 🙂

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