Tag: last job

Free float and rupee volatility

Following a brief discussion on twitter with @deepakshenoy I’m wondering what’s preventing the RBI from making the rupee fully convertible. The usual argument for full convertibility is that it will make the exchange rates volatile. My argument is that exchange rates are already so volatile that the additional volatility that could stem out of a free float is marginal, and a small price to pay.

The wise men at RBI, though, might argue the precise opposite. They will claim that in terms of already high volatility they wouldn’t want to do anything that might add to volatility, however marginally. This is a constant battle I faced in my last job, of delta improvements. I would frequently argued that when something was already high, making it delta higher was not so bad. I would argue in terms of making systemic changes that would reduce drastically the already high number, rather than focusing on the deltas.

Coming back to the rupee, you can also imagine the wise men talking about some stuff about black money and hawala money and all that. The thing with making the rupee fully convertible would be that hawala would be fully legal now, and the illegal practice would cease to exist. And when something becomes legalized it comes back to the mainstream rather than remaining on the margins, and that is always a good thing.

Then you can expect some strategic affairs experts to bring some national sovereignty and national security argument there. There will be people who will talk about the increase in counterfeit money (since it’ll become easier to “smuggle” rupees into India then), and about how foreign governments might pose a threat to India’s security by manipulating the rupee (who says that threat doesn’t already exist?)!

I don’t know. I don’t find any of these anti-full-convertibility arguments compelling. If we do adopt full convertibility, though, we can at least pay Iran for the oil we get from them, and that might for all you know help tackle inflation. I don’t, however, expect the RBI to act on this.

Studs and Fighters and Form

It’s been a long time since I wrote about the Studs and Fighters framework. I had overdosed on it a few months back, when I’d put some 3 posts in 4 days or something, but that was when I was hajaar enthu about corporate affairs.

It’s been almost two months since I quit my last job, and in this period, among other things I’ve lost all enthu for anything corporate. I don’t find Dilbert funny anymore. I usually just put well left to the office-politics posts that some of my friends on Google Reader share. And since the S&F theory was mainly meant to deal with corporate situations, that too has gone to the backburner.

I was thinking about Mitchell Johnson’s inclusion in the Aussie team in the Third Test. Given how badly he has been bowling all tour, and given that Stuart Clark hasn’t been bowling badly at all, it seems like a surprising selection. But dig deeper, and employ my favourite framework, and you’ll know why he’s still in the team.

It seems like Johnson is a stud bowler (as I’d remarked earlier, Test match bowling in general is stud). And the theory goes that form matters so much less for the stud. This is mainly because studs are significantly more inconsistent than fighters, which makes forecasting one data point based on historical data a nightmare. This also means that the last few data points say much less about a stud’s next data point than they do for a fighter’s case.

All that a stud needs to do to make amends for his hitherto bad form is to come up with one, or maybe a handful of moments of inspiration/insight. And that can happen any time. In fact, theory says that it is more likely to happen when the stud is defocussed on what needs to be done.

So even in the first couple of Tests, you could see Johnson occasionally coming up with the totally awesome delivery, which would produce wickets. Most of the time he was crap, but the occasional moments of brilliance were enough for him to make an impact. So the thinking in persisting with him is that sooner or later, he will produce enough moments of brilliance in a game that no one will look at all the crap he has bowled, and even that the moments of brilliance can push up his confidence which can lead to less crap.

This kind of thinking doesn’t apply to a traditional fighter, who isn’t capable of that “moment of brilliance”. He usually relies on consistency, and accuracy, and process to do what he needs to do. For the fighter, it has to be a steady rise from one “form situation” to another. And so persisting with the fighter doesn’t make sense. So for example, if Mike Hussey continues batting in the same way as he has been this series, there is a case of sending him to domestic cricket.

The problem with a lot of fighters is that they refuse to acknowledge the existence of studs and treat them too as fighters (on the other hand, most studs understand the existence of fighters). And this treatment of studs (assuming they are fighters) can have disastrous effects.