Free prostitution

What I don’t mean is “Yippie!!! Make prostitution free, who likes to pay for it anyways”

The issue of prostitution cannot be answered without taking into account the issue of human trafficking, pedophiles, exploitation by pimps/underworld/law enforcement authorities, drugs, AIDS/STD, religion and scores of other vices that exist in the society. Most countries find the issue so complicated, esp. if one adds the political, societal and moral dimensions to it that they prefer to ban the entire profession all together.

However in this ostrich like approach of governments looking the other way and praying that the problem will disappear, they make things worse. Prostitution is one of the oldest profession and answers to one of basic needs of the society. Almost in all societies there are a few ancient texts that highlight the importance of prostitutes in maintaining the morale of the army and law and order in the city. Yet for all their important roles, the prostitutes/mistresses were always outcasts and looked down upon.

However this post is not to glorify the profession or convince people to visit one. All I am saying is whether the governments like it or not, this profession exists in some shady alley of the city or another. The cities which allow it legally are better off. Firstly it makes it easier for the law enforcement authorities to regulate the trade. Ensure proper rights and safety for the sex workers and control the vices which are often seen in the unregulated trade.

However the moment the government bans the trade, everything becomes illegal and the distinction between the good and the evil disappears. Instead of drug and disease free women practicing out of their free will, the society ends up with underage girls being pimped away and treated like slaves. A situation which is neither good for the society nor for the girls trapped inside this trade.

Reposting my 2009 article

 

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M&A deal structuring: All cash or stock or seller financing

Recently my colleague and I were discussing the impact of the deal structuring on the valuation of the target company (from the eyes of the acquirer and its shareholders). Few of the points discussed here are as follows:
1. Any investment (Greenfield/brown-field/acquisition) should be aimed towards creating the highest NPV for the company. Also if the deal is profitable, then rarely do firms have issues in tapping the capital market. Hence structuring has only a marginal impact.
2. A company which is not excessively levered (manufacturing firms with huge debts) or is a bank with minimum capital requirements should always go for all cash deal rather than a stock deal. This is because of following reasons:
a. If the company has huge stockpiles of cash/cash equivalents, then most likely this money is earning a miniscule LIBOR rate and any wise business investments should beat this return by a huge margin. (low opportunity cost)
b. If the company does not have too much capital, then cash deal will force them to borrow and debt servicing often improves the financial prudence of the target.
c. I believe a bird in hand is better than 2 in the bush. A company should either return the surplus to the shareholders as dividends or it should invest. Otherwise management forgets its fiduciary duties and tends to squander away the money through pvt. Jets.
d. Also it puts a cap on the size of acquisitions and its frequency. Thereby minimizing the risk taken by share holders.
3. Seller financing is very common when a PE or financial firm is selling the asset. This involves the seller to fund the acquisition by loaning part of the proceeds (sometimes working capital/corporate debt to run the firm too). The only question one needs to ask themselves why was the seller in such a hurry to offload the asset that it did not even stop to collect the cheque? Any FCFE computation would look very rosy because of the reduced capital requirements, but one should not under estimate the risks.
4. Unless there is a severe liquidity crunch, share dilution rarely works in the benefit for the existing share holders. Lesser the mouths to feed, the more for me.
5. Not to mention that stock deal means 100% financing through equity. Since equity is more expensive then debt/free cash, unless the stock is over-priced it rarely makes a good business case.
6. Also because of the exit restrictions stock deal don’t have an earnout components (or have smaller mgmt retention bonus). Hence acquirer takes in more risks than the conventional deals.
7. EPS bump: A lot of firms trading at very high PE ratio believe that by acquiring another company trading at a much lower PE ratio, they increase the EPS of their company and hence create share holder wealth. But the challenge remains in convincing the investors that the bigger elephant will continue to grow at the same rate.

 

Dentist and Ice-Cream Parlor

As a child, I actually used to wait for my 6monthly visit to the dentist. Reason: A trip to the ice-cream parlor immediately afterwards was the deal I had made with my parents. Even my dentist used to recommend it, because it was cold which soothes the swollen gums after the treatment and also is loaded with calories so it’s the best substitute for the liquid diet that is recommended after any dental procedure.

20 years ago there were not many ice-cream corporate chains, but still the owners were wise enough to know that it makes sense to open a store right next to the dental clinic. However in Bangalore that’s not the case anymore, I even don’t see any billboard/pamphlet directing me in the right direction. I wonder why? Is it a connection that is unique for me and does not work for the masses or the big marketing analytics team have overlooked the aspect.

I always believe that parents secretly feel guilty for forcing their kids to visit a doctor/dentist. Hence after the visit they are ready to reward the kids with anything!!

 

COUP SOUP KA POOP

Guest post by T.R.Ramaswami

Apropos several loose cannons on the so-called coup in January 2012, there is a precedent going back to 1964. Field Marshal Maneckshaw, who was then the Western Army Commander was given instructions by Gen. Chaudhuri, the then chief, to move with troops into Delhi, in case Nehru died, which he did under protest. Chaudhuri did not back Maneckshaw and Maneckshaw was then shifted to Eastern Command. The explanations were given later. This and the so-called “coup scoop” supposed to have taken place in January 2012 have created enough debate.

Many believe that a coup is impossible in India because you need all the army, navy, air-force and the strategic forces commanders. This is amateurish – the more the accomplices, the greater the chances of leaks. All you need is a brigade (50 companies of 100) armed to the teeth. In an urban jungle planes and tanks and even jeeps are useless against foot soldiers as three top Mumbai policemen realised too late against the terrorists. First, electronically and physically isolate Delhi – telecommunications, TV, radio stations, internet gateway, media offices, airports/ road/railway routes. Coup timed when Parliament has full attendance – forthcoming Presidential elections. Just one company can take all MPs. Recall what five men did in Delhi in 2001 and ten did in Mumbai in 2008.

The remaining seal Rashtrapathi Bhavan, North & South Blocks, Supreme Court, IB & RAW HQs, Delhi Police, BSF/CRPF HQs, foreign diplomats and top corporate honchos. With MPs, babus, IB, etc in custody, all other commanders, police and para-military will be only too happy to join the coup. Initial tipping-point success within 24 hours is essential to bring all on board. Since no Lieutenant-General / Major-General or their equivalents need be initially involved things will look normal. Assuming this plan does not work and the other forces mount a counter attack on Delhi – all VVIP hostages will be shot dead by the coup group before they too perish. Delhi will be rubble. As far as the people are concerned, either way it does not matter! Right? Anyone want to be my 2i/c?

 

IN DEFENCE OF GEN. VK SINGH (RETD)

By T.R.Ramaswami

Whatever the controversies during his tenure, the General has taught us a few things that we would
need to remember

‘Thank God he has retired’ echoed from several quarters, including our media, some of whom speculated

whether he would hand over charge! Look at the General’s service record – in 42 years of service, before
becoming Chief, he was in Army HQ for just one posting and that too as a Major. In AHQ you don’t count for
much unless you are at least a Major-General. His successor has had about half a dozen AHQ assignments and
three UN postings. It would be interesting to know how many such postings other chiefs have had. Everyone
knows that HQ tenures help build connections and relationships, even beyond the army, that prove useful later
on. Frequent postings in HQ are also associated with a more “political nature” and “flexibility” of the officer.

Has the government or the Supreme Court established that 1951 is NOT the birth date? All vacillated, beating
around the bush, resorting to semantics like “threshold documents” – the application form and two letters. All
the promotion letters, issued by the same Military Secretary’s Branch right up to the rank of Major-General,
which showed 1951 as the birth date, were conveniently ignored. Were these also not “threshold documents”?
Every third party document – authorized by law as proof of birth – hospital records and the school certificate
– showed 1951. If these are superseded hen why ask anyone for proof of birth? What if the application form
stated 1951 but the school certificate said 1950? Which one would then have been treated as correct?

Ever since he filed the suit in the Supreme Court, the Government would have engaged the IB, CBI and even
the ED, just as in the case of Jagan Reddy – to try and find some hole in his career to nail him. They evidently
failed miserably. You may ask – is there any proof that the Government did this? Answer – is there proof they
did not? Who leaked the letter to the PM? A letter can be leaked only by the author and the recipient. Had the
author been the source of the leak the Government would have trumpeted this from the ramparts of Red Fort.
Silence reveals a truth that is inconvenient. Recall what Sherlock Holmes said – when you have eliminated all
possibilities through fact and logic, whatever remains is the truth.

Why are the contents of the letter secret? Only strategic macro numbers are to be kept secret. But the larger
picture of arms shortages etc. are of vital knowledge to the people whose money is taken to fund the defence
budget. We have the right to know whether that money has gone. In any case there is nothing so secret about
all this – every foreign intelligence agency and arms suppliers, who are also mostly foreign, know the exact
picture of our armed forces, probably better than the babus and netas.

The “scoop” of the “coup” was nothing more than media “poop”. Are we to believe that the government
continued with a chief for 5 months after an attempted coup? What rubbish. Either Gen. Singh would have
become the Chief Martial Law Administrator or gone to jail or even shot for treason. Look at the nadir media
reporting has fallen.

What the General has achieved, for the benefit of the army and succeeding chiefs, given the flurry of
acquisitions, enhancement of financial powers etc, all within six months, is to establish an old Hindi proverb
– lathon ke dev (or is it bhooth?) bathon se nahin mantey. Snuggly cocooned in South Block, the babus have
been taking the netas for a ride. Recall how they managed to scotch the proposal of a former Defence Minister
to send them to Siachen and other hard postings to see for themselves. ‘Ignorance is bliss’ is the credo of the
babulog as it helps in fluffing off responsibility.

We are told that the new chief has a daunting task ahead to set right the civil-military relationships. But is it
his sole responsibility? What about the Defence Minister? Can he make a clear statement that he is the civil
authority to whom the chiefs are answerable and not the babus? Will he have at least that much courage?
Next, can he back up his statement with empirical and visible action? Can he ensure that files from the armed
forces take the route – PSO – Defence Secretary – Chief – Defence Minister? After all the Chiefs are above the
Secretary in the warrant of precedence and should have the last word before matters go to the Minister. This is
true civilian authority.

Further, why should the babus have any role in armed forces promotions? For fairness? Then who ensures
that promotions in the IAS cadre are fair? Why not let the IPS do that role? And let IPS promotions go to the
army to ensure “fairness” all round! If we cannot trust each of the cadre bosses to be fair, then how the hell
did they get appointed in the first place? And what is the “integrity” of the IAS cadre? It was this cadre that
gleefully processed the emergency proclamation. The then Home Secretary, N.K.Mukharji, ICS (later Cabinet
Secretary and the last ICS officer to retire) refused to toe the line. S.L. Khurana, IAS (!) then Chief Secretary
of Rajasthan proved malleable enough and was brought in as Home Secretary. Of course he was later rewarded
with Governorships. The blackest hour in India’s democratic history was initiated by the IAS cadre. And their
willingness to bend or even crawl to the wishes of their political masters, who conveniently choose to remain
ignorant on several aspects of statecraft, ensured rewards. If we have democracy after 1975 it is because of the
armed forces. It is time the Army and other Chiefs start pulling their weight and get meddlesome babus out of
their hair.

Evidently the problems are on account of the sheer lack of knowledge and incompetence of the political class.
And hence they have placed the bureaucracy as armour in front, and this cadre plays its own little games.
Will you trust the Defence Minister to go for a one-on-one talk on border issues with the Chinese Defence
Minister? He will be eaten raw with soya and chilli sauce.

Want civil-military relationship to be put on an even keel? Let the netas learn what it all about. Even though it
will not win elections. Better late than never.

 

maturity

Maturity is the ability to control anger and settle differences without violence or destruction.

Maturity is to have patience.

Maturity is the willingness to pass up immediate pleasure in favor of the long-term gain.

Maturity is perseverance, the ability to sweat out a project or a situation in spite of heavy opposition and discouraging set-backs.

Maturity is the capacity to face unpleasantness and frustration, discomfort and defeat, without complaint or collapse.

Maturity is humility. It is being big enough to say, “I was wrong.” And, when right, the mature person need not experience the satisfaction of saying, “I told you so.”

Maturity is the ability to make a decision and stand by it. The immature spend their lives exploring endless possibilities; then they do nothing.

Maturity is the art of living in peace with that which we cannot change, the courage to change that which should be changed — and the wisdom to know the difference

ride vs drive

why is it that you drive a car but ride the bike?
you ride in a train, on the horse… but drive me crazy.

wonder what is the rule for selecting drive and ride