Category: arbit

Big forward, little forward

When most teams play a front two, it comprises of a small quick guy (called the Number Ten) and a big guy (called the Number Nine). The convention is that when the team is defending, one of these two stays up ahead (just beating the off-side mark, wherever the opposition defence line is), while the other tracks back in order to help out with the defence. The worldwide convention in this regard is for the Number Nine to stay up front in anticipation of an attack while the Number Ten drops back to defend.

Liverpool, of late, however, have played differently. Their Number Ten (figuratively, since he wears seven on his back) Luis Suarez is the one usually left alone upfront when the team is defending, while the number Nine Andy Carroll tracks back to help out in defence.

The logic of this policy is two-fold. One, an additional big player coming back to defend means greater ability to win defensive headers within the box (think of it in terms of winning rebounds in basketball). Secondly, Liverpool under Dalglish have preferred a pass-the-ball-out-of-defence method rather than clearances. This means that when the offence breaks and a counterattack is to be launched, the ball is more likely to be played along the ground to the forward rather than up in the air. And Suarez is the more likely of the pair of forwards more likely to make use of that.

So what is the concept behind the conventional wisdom of leaving Nine upfront with Ten dropping back into defence? The typical strategy in English football is to clear the ball out of defence rather than passing it out, and the big number nine is well positioned to receive it upfront. The big nines usually also have the ability to ‘hold up’ the ball, to allow his team-mates to join him. The number ten, being quick, is able to quickly join the number nine in attack.

The other factor behind leaving the number nine upfront is that they are usually one-dimensional players, with the only abilities being to win headers and hold up the ball. They are either no good in defence, or have big strikers’ egos that prevents from joining defence effectively. Number tens, on the other hand are more skilled all-round and are more likely to come of use in defence.

In this sense, Carroll is not bad at defence, and more importantly he is young and out of form, which makes it easy for Dalglish to force him to track back while defending. So far, it seems to be working.

Ancient Bankruptcies

This post was written two weeks back, during one of those days when I didn’t have internet access at home. Posting now. 

In the course of a rather elaborate shower this morning, I started thinking about the global economic crisis. I thought of the crisis of 2008. I thought about the Arab countries where there is revolution. And I thought about Greece. And I began to wonder how such events had been handled in the past.

A long time ago, most parts of the world were ruled by kings. People assumed kings had divine right to rule, and they rather gladly parted with a big part of their income as taxes. These taxes would go into the treasury, and be used to finance, among other things the administration of the kingdom. Those were times of great wars and battles, and hence it was important to keep a ready army, and the treasury also financed that.

The best thing about being a king was that you weren’t really questioned about your spending, and thus kings could also spend a substantial amount from the taxes they collected on themselves. On living a life of opulence, keeping several wives or concubines while large parts of the population went without any, on building monuments to their fathers, their forefathers and to themselves. If Behen Mayawati were a queen, for example, nobody would’ve dared to question her expenses on erecting statues of herself.

This lack of accountability did have an up-shot, though. The large surpluses that were generated for the royal treasury by means of squeezing every last ounce of blood from the subjects (who willingly gave it, remember) meant that kings could invest on art and architecture. Thus, palaces funded artists and musicians. Grand buildings and mausoleums and temples were built, and intricately decorated, the results of which are being seen today in terms of increased revenues from tourism. Sometimes, though, the kings would over-reach and spend much more than their kingdoms could possibly finance. What would happen then?

At first, there would be an attempt to increase taxes. For a while, people, still in the belief that kings were gods, would give in. And then they would begin to protest. And refuse to pay further taxes. In effect, they would go on protests ‘against austerity measures’. In the light of these protests, the king would need greater use of his army in order to consolidate his power. But his treasury would be dwindling.

With the army over-worked, but the kingdom’s finances tight thanks to a depleting treasury, dissent would start to brew in the army. Getting wind of this, a neighbouring king would see an opportunity. Soldiers would be bribed, though one cannot really call it that, tempted with higher salaries backed by a stronger treasury in order to change allegiances. And the neighbouring king would declare war.

The beleaguered king would now come under pressure both internally and externally. He would not be able to keep up the fight for long. The war would soon be lost and the king would either be dead or captured. And the people would gladly accept the new king as their new god, and start paying taxes to him.

The unfortunate thing about this parallel now is that there is now no neighbouring country to Greece that could possibly pull off an audacious annexation. Even the US, the attacker of last resort, has its own set of trouble. Essentially, Greece has chosen a good time to get into trouble – at a time when everyone else is also in trouble. And this also means that the people of Greece will continue to have no respite from this politics. In the medium run (Hail Gebreselassie) they will have no choice but to accept austerity.

How do you control petty crime?

Last Wednesday I saw a chain-snatching live. It was late in the evening and traffic was moving at a snail’s pace on Good Shed Road (formally called TCM Royan Road). I was on my way to the in-laws’ place in Rajajinagar. There was an unusually large number of auto rickshaws on the road (may not be that unusual considering it’s a popular road for getting to the railway station and bus stand). We took about twenty minutes to cover the distance of about a kilometer.

The auto rickshaw in front of my car was close to the kerb. The jam meant it was stationary. There was a boy walking on the pavement, maybe in his early teens. I saw him walk closer to the edge as he approached the auto rickshaw. I saw his hand move swiftly, and then his legs. He was speeding into one of the numerous alleyways that stem off from TCM Royan road. It was clear that he had snatched a gold chain that had been worn by a woman in the auto rickshaw.

One man got off the auto rickshaw and ran after the boy. I don’t think he would’ve made much headway, for the boy had too much of a headstart. Also, the thief had escaped into familiar territory, inhabited by familiar people, some of who might have actually encouraged his crime. The chaser didn’t stand a chance.

Make me wonder how one could control such petty crime. The speed at which it all happened, no one would have been able to “get the face” of the thief. Since it was far from an intersection it is unlikely there would’ve been CCTV cameras. The traffic, the twilight, the crowds on the road and the lack of them on the footpath meant the chances of the crime failing were really low. In the worst case, the owner of the chain would have held on to it and the boy would’ve run away empty handed.

I’m sure the crime would have been reported. A gold chain costs a lot, and the family in the auto rickshaw didn’t look particularly well off. But the case would’ve got buried in the midst of several other similar ones. As long as the thief was careful to not strike too often, which would’ve brought him unnecessary attention, there would be no way he would get caught. And given the geography there was little onlookers could do.

So I wonder once again, how are we supposed to control such petty crime? At this moment, I don’t have an answer.

Disconnected Life

The last forty eight hours were spent without internet connection, perhaps the first time I’ve spent an extended period of time at home without being connected. At first, it was incredibly peaceful, as without distractions it gave me enough time to finish off in 2 days all the 3 books (none of them very heavy, mind you, and all were “funda books”) that I’d brought home from the British Library. What was incredible was the amount of time I had in general, for everything. With the internet on, there are way too many distractions. Tweetdeck buzzes every minute. You are keen to “unbold” every mail as soon as it arrives in your inbox. Out of sheer habit, you periodically check out facebook and cricinfo. Lots of time gets wasted, no doubt.

I’d be lying, however, if I were to seay that I didn’t miss the net at all. Foremost was the need to check email, which I did though my phone periodically. I didn’t bother, however, unbolding all the stuff that was there. I only checked the mails that I thought were important, and the rest were “cleared” after I got back my connection this morning (the outage was because I’d applied for a new data plan, and the worthies at BSNL (bless them) decided I should go through some pain for having put them though the pain of changing the plan).

Then, there was some research I was trying to do yesterday, and I was looking for some data, which I wasn’t able to get since there was no internet. I went out of touch with my usual gtalk/twitter friends, but since it was only for a day I don’t really mind that. Most importantly, I missed regular updates of Ranji trophy scores, since those weren’t available anywhere else. It was too much of a hassle to be only via the phone (I don’t have 3G) for extended periods of time. There was also a lot of writing I did in the period, and all those blog posts are now sitting on my hard disk. I’ll upload them one by one with sufficient gaps so that I don’t flood you.

The worst part of no internet was the loss of the “option value” to stay connected. The best part was that it gave me a lot of time to do whatever I else really wanted to do without all the distractions the internet brings. I hope to go on an “internet break” for some time every day, switching off my modem for a few hours. Hopefully that’ll help me make better use of my time. For now, I’m glad to have the 4Mbps connection!

Slashing Art and Activism

Yesterday I happened to drive all the way to Domlur to attend this “Art Slash Activism” event organized by the Center for Internet and Society and one other organization whose name I’ve forgotten. I must confess that I had set my expectations too high, for the event’s description on the website itself was a little hazy and “global” (as we would put in B-school parlance). Given it was set as a part of a series of events on “open data”, and from what I could gather from the event website, I thought there might be fundaes to be got on stuff like data representation – a topic I’m quite interested in and am looking to learn. Maybe this was too optimistic, but I expected some Hans Rosling type visualizations there.

As it turned out, I ended up walking out an hour into the event (it was supposed to last for two hours), unable to take it any more. I don’t know if “Art Slash Activism” meant that people had to speak on exactly one of the topics. Or maybe it was just that the description of the overall theme was so vague that the designated speakers simply went up and spoke on whatever they wanted to speak, giving the same kind of speeches they give elsewhere. The speeches were quite disjointed, I must mention, and none of the three that I happened to sample during an hour there were anything close to spectacular on their own legs, either.

First up was an activist, who I was to later find out, was from an organization whose representatives we had majorly trolled when they had come to IIMB to give a series of guest lectures on culture. She spoke about activism, essentially about her research, using some high-sounding terms, and trying to diss certain popular discourse. While the content of the speech might have been appropriate in another context, I soon had the feeling of what I had gotten myself into. The curious thing was that people all round me were taking notes, furiously. Like this was a lecture in their college on which they would be quizzed in their next exam. For what it was worth, I took out my fancy notebook and fountain pen, but didn’t write anything.

She was followed by an American lecturer and librarian, who gave a power point presentation on “what is a database”, again something I thought was quite trivial and not really in context. Maybe it was my fault, and I didn’t understand the context at all, but this guy seemed like one of those Americans who think that people in “third world countries such as India” know little, and need to be educated on the fundamentals.

There were supposed to be four speakers on the day which was supposed to be followed by a discussion, but I left midway through the third speech, which was by an artist, who spoke about her art. It was all so disjointed and disconnected. I don’t know, and don’t particularly care, if the last speech would have added value.

I don’t particularly regret going. The event website promised “option value” – the option that I would meet some interesting people at the event, and the option that I would get to learn something I wanted to learn. In the event, the option expired worthless. I’ll continue to go to events or meet people for the option value, and I know a lot of them might expire worthless. But I know that if I keep doing this, there might be a breakthrough somewhere. And I’m chasing those potential massive payoffs.

The moral of this story is about clarity in communications. When you try sell something to people, you need to be concise with your communication, and let them know exactly what you’re trying to sell them. If you’re vague, there is a chance they might be disappointed because they expected something completely different from what you were actually offering. And this is a major problem for me as I try set myself up as a fairly niche consultant.

“But she is a really nice person”

That is the reply I usually get when I tell someone that someone else is dumb, or is an imbecile or is boring. And now I think I have some insight into why people who are otherwise idiots or irritating or boring are also extremely nice people, with “big hearts”.

Basically I’ve found that whenever I’m low on confidence or self esteem I end up being more sensitive, both with respect to myself and others. I display greater empathy, I care more about how people would feel and react to things I would do, and my usual buffalo skin disappears and I get affected by any adverse comments or remarks or incidents. Actually, I’ve seen a two-way implication here, but again you need to remember that I’m extrapolating from one data point here. Back in 2001, I had received extensive feedback (from various parties) that I had become too arrogant and self-centered, and that I needed to make an effort to be nicer and more sensitive towards people. I did make that effort, too successfully I think, for though I consequently became more popular, I entered into a prolonged period of low self esteem. Anyway, I digress.

So, based on the one strong data point that I have, which is myself, I hypothesize that low self esteem leads to greater empathy. People who you are likely to normally consider to be “boring” or “stupid” are likely to know that people think of them as that, and are consequently more likely to have low self esteem. And going by my hypothesis, that means they are more sensitive, have greater empathy, and “have big hearts”. And so, the remark “but she is a really nice person” in the context I mentioned largely holds true.

Travel agents and investment bankers

The more I think about it, the more I’m convinced that travel agents perform a very similar role to investment bankers. In the olden days, not everyone had access to financial markets. In order to buy or sell stocks, one had to go through a brokerage company, who would be paid a hefty commission for his services. The markets weren’t that liquid, and they were definitely not transparent, so the brokers would make a killing on the spread. With the passage of time, advent of electronic trading and transparency in the markets brokers aren’t able to make the same spreads that they used to. Customers know the exact market price for the instruments they are trading, and this results in brokers not able to make too much out of these trades.

It is a similar case with travel agents. Vacation markets (flights, hotels, etc.) are nowhere as liquid as financial markets, and will never be. Sometimes, when you are booking holidays to a strange place, you know little about it, and hence commission a travel agent to find you a place to stay there. Given that you know little about that place, the agent can charge you hefty commissions, and make a nice spread. Of course, nowadays such opportunities are diminishing for agents, as you have websites such as Agoda which allow you to book hotels directly. Now, at one place you can compare the prices of different hotels, and have better information compared to what the agents traditionally offer you. The spread is on the downswing, I must think.

Then, don’t you think package tours are very similar to structured products? Structured products are nothing but a package of several risks packaged together. By acting as a counterparty on a structured product, a bank (even now ) can afford to charge fairly hefty fees. Structured products are illiquid,  and there is no publicly available “market price”, so it is easy for banks to make themselves good spreads on such products. However, all it takes to defeat this is an intelligent customer. All the customer needs to do is to try and understand the risks himself, and start “unbundling” them. Once he unbundles the risks, he can now trade each of them independently, on more liquid markets, and get a much better price than what bankers will offer him. The catch here is that he’ll need to put in that effort in unbundling.

It’s the same with package tours. Given the bundles, it is easy for the agents to make higher spreads. However, if you as a customer simply unbundle the package (hotels, transport, food, etc.), you can find out the price of each (available on sites like agoda and elsewhere) and find out for yourself the spread that the agent is making. And then you compare the agent’s premium with the “cost” of making all the bookings yourself and make an informed choice.

Apart from communication, among the greatest boons of the internet has to do with dismantling middleman monopolies. It is incredible how much use a little information can be of!

The Global Financial Crisis Revisited

When we talk about the global financial crisis, one question that pops up in lots of people’s heads is about where the money went. Since every trade involves two parties, it is argued that every loser has a corresponding winner, and that most commentary about the global financial crisis (of 2008) doesn’t talk about these winners. Everyone knows about the havoc that the crisis caused when prices went down (rather suddenly). The havoc that the crisis caused when prices initially went up (rather slowly) is less well documented.

The reason winners don’t get too much footage is that firstly, they are widely distributed, and secondly they spent away all their money. Think about a stock or a CDO or a bond being a like a parcel that you play by passing the parcel. The only thing is that every time you receive the parcel, you make a payment, and then pass on the parcel after receiving a higher payment. Finally, when the whistle blows, one person has the parcel in his hand, and it explodes in his face, ruining him. We know enough about people like this. A large number of banks lost a lot of money holding parcels when the whistle blew. Some went bust, while others had to be bailed out by governments. We know enough of this story so I don’t need to repeat here.

What is interesting is about the winners. Every person who held the parcel for a small amount of time was a winner, albeit a small winner. There were several such winners, each of whom “won” a small amount of money, and spent it (remember that the asset bubble in the early noughties was responsible for increasing consumption among common people). This spending increased demand for various goods and services produced in several countries. This increasing demand led to greater investment in the production facilities of these goods and services. Apart from that, they also increased expectations of growth in demand of these goods.

The damage the crisis did on the way up was to skew expectations of growth in different sectors, thus skewing investment (both in terms of financial and human capital). The spending caused by “small wins” for consumers put in place unreasonable expectations, and by the time it was known that this increased demand came as a result of an asset bubble, a lot of capital had been committed. And this would create imbalances in the “real economy”.

Yes, the asset bubble of the last decade did produce winners. The winners begat more winners (people whose goods and services were bought). However the skewed expectations that the wins created were to cause damage in the longer term. Unfortunately, I don’t see this story being told adequately, when the financial crisis is being talked about. After all, the losers are more spectacular.

Sadananda Gowda’s Set-up in South Bangalore

Ever since D V Sadananda Gowda became chief minister of Karnataka not so long ago, we residents of KR Road have been subjected to the holdup of the KR Road-SouthEnd Road signal several times a day. The convoy for which traffic is held up is huge, leading us to believe that it can’t belong to anyone but the chief minister. However, the chief minister’s house is in Milk Colony near Malleswaram, so what is he doing in South Bangalore? We wonder if a chinna veetu exists!