The Architecture and Implementation of a Decentralized Social Networking Platform

"Advertisement-supported social networking portals generally
aim to lock in users’ data and exploit personal information
for ad targeting and other marketing purposes.
Because of the network effect, it is not hard to envision a
situation where the information of a very large population
can end up in the hands of an oligopolistic group or even
a sole monopolistic actor. Beyond the obvious privacy concerns,
this outcome would clearly pose problems for healthy
competition, ultimately harming end-users.”

Interesting paper on Social Networking from Stanford University.

Would like this model than Facebook, which exploits users data to their own advantage.
Download the paper.

Emerging Markets

It has become a yearly routine to go through a correction in the Emerging markets and then again recovering from it. But is this global correction a signal towards a global meltdown or just a blip in the global markets.

Some factors to consider.
1. Is the growth happening in US?
2. Are the BRIC still growing?
3. Political Stability in the Middle East.

USA: Alan Greenspan couldn't hold his tongue and has already spitted out the venom "Recession in USA during the later part of 2007". I think his statement may eventually be a blessing in disguise. It would be too much of a hit if the markets rallied further and then fallen. Basically the higher the rise the harder the fall, so did Mr. Greenspan help us to mitigate the harder fall? That time will tell. I personally feel that there might be a very very mild recession if any, at least the economic indications such as Inflation and unemployment point towards this pattern. Generally as a rule of thumb I think a higher inflation is eventually followed by an increase in unemployment. So in the US, we may see some increase in unemployment- though globalization pressures may keep the inflation low contrary to my rule of thumb, but a bust in the local housing market may eventually add to the unemployment.


BRICs: I am not sure why an 8% growth in China is consider as less aggressive. If China has decided to slow down from 120 m/hr to 100 m/hr, it is still an aggressive growth. It will still need oil and other commodities -oil price is not influenced by the demand in China but by the command of USA. I think it is a good long term strategy for India and China to spread its prosperity and wealth to the rural section. It will pay well in the long run to develop an organic economic growth rather than just depending on the exports to the developed countries. So why is everyone panicking. In fact, a mild recession may send more jobs towards the BRIC and sustain the past growth rates. So BRIC will still grow better than US, hence it is still worth investing in Emerging markets.


Political Instability/Gold/Oil: The dollar does seem to be under some devaluation pressure. But the devaluation may never happen. US will be more concerned to attract all the savings from Asia to US than to let it go to Europe, nor would US want the oil to be traded in Euro, which would mark the beginning of the end of the Greenback power as the world currency. As long US has negotiations with middle east countries, the oil will be stable and so will be Gold. But does US want this stability, which may not be in the best interest of it power hungry attitude as pointed out to me by many? Despite my disagreement over the war issue, I still buy into the argument that the big bully of the world may want to have a fight to showcase its arm twisting skills and thus strengthen its financial power over the world.


Bottom line - Growth in US may be slow or probably flat for the next 12 months. Emerging markets will grow this year too. Gold will still go up. World will be unstable for few months, which may become another yearly event. So stay invested in Emerging markets, buy Gold and don't get into US property market for another year.

The local real estate markets in India.

Here is the scale I use:
1: Investment is Highly justified at the current price(implying that there is no bubble and hence may not see any major correction)
2: Investment is justified (Implies that the growth story of the city looks good)
3: Investment is very risky( implies that there may be a major correction in the next 2-4 years)

Delhi(1.5): Has many be industries around. It is not just IT dependent economy. Hence the prices of homes and rents may see some correction but not a major one.

Mumbai(1): Highly diversified industrial city. IT industries are well located in Mumbai as well as Pune. The real estate prices have not gone over the roof. They are very stable. Extremely good Rent/Cost ratio for real estate investment.

Chennai(2) : Real estate prices are touching the sky. Madras has well diversified industries. In the past 2 years it has received all the major IT investments. Real growth can be seen soon in this city. Real estate investment at current level prices in the Mahindra City belt and Mahabalipuram belt may be justified.

Bangalore(2) : The concentration of IT companies is the highest in this city and hence this city has the highest job opportunities. The real estate prices are already sky high and may stay so because of the unparalleled opportunities. If the government can improve the infrastructure in the next 3-5 years, things will be great in this city. Prices may not go up more than 20%. This city has more or less reached its peak.

Pune(2): Again a well diversified industrial city. Soon, Mumbai and Pune may be viewed as twin cities who complement each other. Pune has great climate, proximity to high number of educational institutions and the advantages of being closer to Mumbai. While most of the states in India have only 1 city dedicate towards IT development. Maharashtra spreading the IT investment between Mumbai and Pune for its own advantage. A trend that Karnataka is following with the development of IT parks in Mysore, besides Bangalore. real estate prices are high. If Maharashtra remains a laggard as it has been compared to Hyderabad, Chennai and Bangalore, in the IT investments, then Pune's growth may stagnate.

Hyderabad(3): This city has a very scary picture. It is completely IT dependent city but not as many IT companies so as to make it the number 1 destination for all IT folks, because the kind of IT jobs in Hyderabad are not as god as they are in Bangalore, Noida and Chennai. Not as diversified as other India cities mentioned above. The real estate prices are as High as Mumbai, Delhi and Chennai. But the rents are the lowest. Which point towards a bubble. In the past 2 years, the government of Andhra Pradesh has done nothing but just declared that companies will come and invest in Hyderabad. Till today none of that has happened. The biggest failure has been the Fab City. No new big projects have come up. They only project that the current government is doing is to develop the International airport, which was already proposed by the previous chief minister,Chandrababu Naidu.

India's real estate market.

The Indian real estate market is currently booming. How long will this last?

Every where there are billboards that display IPO of real estate companies. TV media business channels display real estate IPO ads and also IPO ads of companies which add no real value to human life and lifestyle. This is a clear indication that people are in a stock market frenzy and companies that want to dupe people are making the best by capitalizing through IPO.

By investing in such IPO's real estate is becoming costlier for a common man. The real estate companies are taking money from the common man and using it to acquire lands at very high prices(governments are auctioning lands and such IPO companies bid for such lands at exorbitant prices). Eventually they will sell this to common man or to NRIs. In simple words, the real estate companies are using public money to develop real estate at high prices which eventually leads to unaffordable housing prices.

The dollar flow into India through FIIs and NRIs is causing a lot liquidity in the market, which may cause inflation. RBIs hike in the CRR rate is a clear indication that it is concerned about inflation and wants to put a check on it. While, the US interest rates may decline from mid 2007 onwards, the story may not be same in India. If inflation is still unchecked in India and the US Dollar keeps weakening, it may increase the FII's flow into India and trigger more inflation, forcing RBI to hike the lending interest rates. Eventually this will control the liquidity in the market and may cause the property market to stabilize.

Also, one of the factors that may put a stall on the housing prices is the affordibility. As a rule of thumb, an individual feels comfortable to afford a home that is 4-6 times the multiple of his/her salary. The average income of upper class in India( both wife and husband earning, software engineers) is approximately Rs.12-20 lac. That means they can afford homes worth 48-120 lac. No, wonder the home prices in India are getting to those prices. Note of caution, these kind of homes are affordable to Software professionals because the salaries have not touched these high figures in other job sectors.

In the next few years, salaries will definitely stabilized in India, unless India starts getting more high end jobs, besides the current back office work. In such a case the current price are definitely justified. But, how long can a week dollar be beneficial to India's export is what may dictate the meteoric growth that India has achieved in the past 10 years.

Better Karma

How many times have you felt a desire to make a difference in someone's life, especially children who are living in oblivion about the progress of the world while you are abreast with more information than you could use. It pinches our hearts when we see such children wandering near the temples and hotels in India, who are struggling to put some grains in their stomach, while our children are happily moving their thumbs on an Ipod or a PS2, humming to some songs or playing some games.

Every year thousands of Indians make a trip to their motherland. Most of the time it's a pleasure trip and catching up with relatives. Imagine the difference you can make in a child's life or your neighboring school or community by contributing just 4 hrs of your vacation time and that too without having to miss out on catching up with your friends and relatives.

I hope that some voluntary organizations can put some effort and create a pattern of tasks that others can replicate. Tasks that are 4/8 hours long which can have a positive and constructive impact on their community, or school, or nearby slum and involves couple of individual per session. People from USA, UK and Australia who go to India, Bangladesh, Srilanka could sign up for such tasks. They can be given some preparation material which can assist them as to how they are going to contribute their 4/8 hours.

It may not be easy to break the tasks because disparate people may want to contribute and it would be difficult to align their tasks so as to creates a contiguous outcome or impression on the children or community that is being assisted/helped. While it may be easy to go and just give a casual talk to children, assimilating these 4 hrs talks/contributions given by different people into a 2 or 3 credit hour course may be difficult and needs some planning/coordination. This is where organizations like the Googles' and Infosys' of the world who have a philanthropic heart can step in and contribute some resources to create such a framework.

In India and Bangladesh, children from poorer section of the society, whose parents are, in most of the cases, uneducated, go to schools where the students to teacher ratio is 80:1. Assisting such children in doing their homework seems like a simple task yet comes with its own challenges. One day someone may go there and teach a particular method to solve a math problem and the next day someone else may teach a different method to solve the same problem, thus creating more confusion for the children.

One of the important factors that I have noted is, if a person is on vacation in India he/she may be less inclined to make such voluntary contributions. But if such voluntary activities are clubbed along with our friends or relatives, it makes a huge difference and people are motivated to contributing their vacation time becasue they will not miss out on there relatives. We should create small tasks that people can take up when they make a trip to India. A task small enough so as to not steal a lot of their precious vacation time but big enough to make an impact in some child's life or their community. Making a difference, One Trip at a Time.

Emerging Markets!! Should we stay Invested?

At the start of the year 2006 I had suggested that investment in Emerging markets and Gold would be the way to go. So where do we stand today. Well, I reiterate my suggestions. The fundamentals in India and China are good. Wealth is being created in Pacific Basin countries. These countries would snatch more jobs from US and UK. Long term, its a growth story for these countries. The valuations are good and the current price correction has just added the icing to the cake. Point of concern, there is too much volatility in the markets. It is un comforting to see the BRIC markets fluctuate 2-6% in single sessions and unnerving to know that these huge fluctuations have become chronic. Seems like the markets haven't yet matured. For the Indian markets, I would like to see the SENSEX touch 8500 during the second half of this year and I wouldn't be surprised to see 8000 also. But don't bet on the bottom to get into the market. Anything below 9000 should be a good entry point.

US Fed is taking measures to combat inflation, by increasing the interest rates. Signaling to the investors that Dollar will be stronger and more attractive than other currencies/Gold/other investment havens. This would definitely cause the investment money from countries that have Current Account Surplus to push more money into US. I am not sure what would the Fed do with all the money that it may attract and how it would pay the higher interest rates to those who invest in US Treasury bonds. Because banks will not be able to push this money on to consumer at such high, inflation fighting, interest rates. The cost of money will be too high as Bernanke bumps up interest rates and that would take its toll on the growth of the economy.I wouldn't be surprised to see the money going back into the emerging markets because GROWTH is happening there.

Housing markets have already started their downward journey and further correction in store due to the increasing interest rates in US. Just wait till 2007/2008 when the 5/1 ARM loans of many consumers will mature. The interest rates will be too high to sustain the mortgage payments and thus there will be an up tick in mortgage payments defaulters.

Overall, this is an excellent time to get into Emerging markets. So the mantra is, "Stay Put in Emerging Markets". The new globalized flat world is prone to Contagion more than ever and a new paradigm is needed in the investment portfolio, which is to hold on to gold(5-20 % of the portfolio).

BUY
MFunds: MMKBX, TEDMX, Some Gold.
Stocks: YHOO, TRID

Reservation issue in India

While the SC/ST and OBC reservation issues in India are as cyclical as the elections are, it is definitely a very serious issue facing the youth of India.
But everytime these issues come up we have some or the other different and very funny perspective of looking at it.

I came across this comment on the web and couldn't resist laughing. As quoted by Karan_medeco on NDTV Hot Debates.

"I think we should have job reservations in all the fields(FOR PM POST AND HRD MINISTRY) . I completely support the PM and all the politicians for promoting this. Let's start the reservation with our cricket team. We should have 10 percent reservation for muslims. 30 percent for OBC, SC/ST like that. Cricket rules should be modified accordingly. The boundary circle should be reduced for an SC/ST player. The four hit by an OBC player should be considered as a six and a six hit by a OBC player should be counted as 8 runs. An OBC player scoring 60 runs should be declared as a century. We should influence ICC and make rules so that the pace bowlers like Shoaib Akhtar should not bowl fast balls to our OBC player. Bowlers should bowl maximum speed of 80 kilometer per hour to an OBC player. Any delivery above this speed should be made illegal. Also we should have reservation in Olympics. In the 100 meters race, an OBC player should be given a gold medal if he runs 80 meters. There can be reservation in Government jobs also. Let's recruit SC/ST and OBC pilots for aircrafts which are carrying the ministers and politicians (that can really help the country.. ) Ensure that only SC/ST and OBC doctors do the operations for the ministers and other politicians. (Another best way of saving the country..)"

Thinking on the same lines, probably we should also have this extended to politics. Any politician who is from SC/ST/OBC category should be declared as a winner if he/she gathers just 49.5% of the votes gathered by an open category candidate. Let's see how the Congress Party of India likes this idea.

Apart from the many alternatives and solutions, I think we should try to give these reservation benifits only upto 2 generations of a family. Today, the situation is such that the OBC/SC/ST have taken it for granted that they will get all the benifits for all the generations and hence are very complacent and don't develop the values for success such as discipline, penchant to learn and leap ahead, making a better life through hardwork and merit. I wouldn't blame them for it as it is a very common human nature to become uncompetitive when everything is provided for. Government needs to consider this before making any decisions on reservations which evetually become eternal.

Never will it happen that an OBC/SC/ST will beat an open category candidate in merit, because for people in the open category they have to slog and work hard. "Only the Paranoid Survive" syndrome kicks in and keeps them at the helm of everything.

Dangerous illusions, destructive indulgences

Recently, someone had sent me a mail with the following dictionary explaination of the word "timid

timid
tim·id(tim.id)
adj. tim·id·er, tim·id·est

1. Lacking self-confidence; shy.

2. Fearful and hesitant: problems that call for bold, not timid, responses.
3. A person from India, of Indian Origin; Intellectual Indian.

"intellectuals issuing lofty statements calling for calm and advising restraint to the lambs even as the wolves are on the rampage", the plight of timid India is very well mentioned in this article, "Dangerous illusions, destructive indulgences"-by T R Jawahar.