Tuesday, September 30, 2008

'That's a lot of blog-reading, I say.'

That's what a friend said recently. He was going on incomplete data however. This is what my 'blog-reading' comprises of:

A 100 feeds.

1433 posts - at last count - that I saved because I seem to have felt, at the time, that they were worth revisiting.

At least 15 blogs/sites that are not on my feedreader that I visit anyway.

The blogs that I visit more than once a day because I'm following comments or want to follow a link from there that I haven't saved elsewhere.

Facebook Blog Networks (don't get me started.)

All this makes me realise that I need to detox.*

(This may or may not be a temporary farewell note.)

*Another friend says she only follows 10 odd blogs because she's detoxing.

Monday, September 29, 2008

Good Neighbours (Reprise)

Remember this post where I grumbled about the mountain? I just thought it was impossible to understand until y'all saw it with your own eyes.

So. That's the set right there, in the corner of the first image, all broken-down and ramshackle. That's where the parties happen.

The hill is man-made, over the last year or so. You see the one with four or five trucks in the frame? Imagine a whole day of that.

It's all rubbish. Really.

Sunday, September 28, 2008

A Preamble to The Right to Outrage

Or, Husain's response Part II.*


I’d like to apologize for stepping into this conversation sporadically, and that too with such lengthy contributions. But since it was my piece that set this off, I feel that I should offer a response to some of the critiques.

A good place to start might be the question that km asked: Just how is sub-prime lending a problem? If we understand subprime lending to be a process where a high-risk borrower receives money at a higher-interest rate, then there should probably be some provision for that in an organized financial system. But many of the subprime loans in this crisis were given to people who should never have qualified for them in the first place, and whose only chance of being able to make good on their payment was contingent on the value of properties continuing to increase. The lending agencies did not bother to check the accuracy of the information that was filled out on the forms, and even encouraged borrowers to lie about their income and credit histories. Informally, these loans were referred to within the industry as “liar loans”.

But why would lenders do that? Why loan money to someone who you know will probably be unable to repay? It is crucial to understand this in order to make sense of the mess. The loans that were given were mostly by mortgage companies that weren’t even banks. Their intention was to make loans only to sell them off to Wall Street, where these loans were turned into securities which passed along from hand to hand, getting transformed into more and more esoteric instruments along the way. As long as the bubble could be kept going, all parties in the transaction made large sums of money (where do you think the $700 billion that is being asked for disappeared?). The racket was too tempting. The runners of the scheme knew it was going to fail; Warren Buffet had called derivatives “weapons of mass financial destruction” way back in 2003. But they also knew that when the house of cards came tumbling down, it would be no skin off their nose. Someone else would be left holding the bag.

There was no regulatory framework to prevent the repeated cutting and repackaging of securities, rendering the system so opaque that no one knows which domino can fall next. There were two other major regulatory “lapses”. One, investment banks were so highly leveraged (for instance, Morgan Stanley has $30 of assets for every $1 of capital), that any gain or loss was highly magnified. These corporations were boldly going where none had gone before, laying down huge bets with borrowed money. Two, the government chose to look the other way on several issues of conflict of interest. Remember Enron? It had hired Arthur Anderson to audit its books, even while it retained the same company for huge consulting projects. The Sarbanes-Oxley Act fixed that but only after a major debacle, which claimed several prominent organizations. In the case of the current crisis, the securites that were created out of the mortgages became desirable only because credit rating agencies like Moody’s and Standard & Poor’s gave them AAA ratings. Why did they do that? Well, financial institutions that want to sell their securites hire the rating agencies for a large fee to help them convert their mortgages into securities that can be sold in the market. Shouldn’t the rating agency have been an independent organization that didn’t have a dog in the fight?

But why was there no adequate regulatory framework in place? Because it had been systematically hollowed out over the years by lawmakers eager to do the bidding of those with deep pockets. It wasn’t for nothing that Freddie and Fannie spent over $174 million in lobbying Congress over the last 10 years. The justification for reducing regulatory oversight was cloaked in ideological terms. The “free market” should be allowed to do what it deems best. What’s good for Wall Street is good for America. The benefits will trickle down. You know the drill...

Keep in mind the following. Fannie Mae was a publicly owned enterprise till 1969 and served its purpose very well. It bought up mortgages from banks, freeing them to loan more money to newer homeowners. By 1970, around 63% of American families owned their own home, up from 43.6% in 1940. Everyone made money, though no one made exorbitant profits. But once private enterprise started competing with Fannie and making more money because they were free to take greater risks, Fannie was spun off as a private concern too in an increasingly deregulated environment; a process that pre-figured the current scam.

So, on to the other major question I wanted to address: Is it fair to blame Wall Street (alone) for this mess? The answer – of course – is no. Wall Street stands in – as its alpha male – for a system that is designed to screw over the disadvantaged. While this has always been the name of the game, its nature has been significantly altered in recent times. To take just one indicator, the Wall Street Journal reports that now the top .01% (14,000) families own 22.2% of the nation’s wealth, while the bottom 90% (around 133 million) families, a mere 4%; numbers not seen in nearly a century. A system of crony capitalism is firmly in place, that has been responsible for the redistribution of wealth from the poor to the rich (check out the Gini coeffiecients over the recent past).

The so-called “greed” of those who were seduced, cajoled, and deceived into taking on the subprime loans is “understandable” because we can all put ourselves in their position and justify their actions. They wanted to move into a decent neighborhood and/or make some money. They assumed that this would happen because they were being told over and over again that the prices of property was rising and would continue to rise, that they’d be foolish to pass this opportunity by, and that the only thing that was holding them back was an inability to get a loan – a hurdle that the salesperson claimed could be easily surmounted by signing on the dotted line. The “greed” of the Wall Streeters however came out of a desire to make vulgar amounts of money from a process that they very well knew was a scam, one that would eventually and inevitably extract a price from the general public in the shape of a taxpayer bailout, but also from poor and vulnerable communities. I suggest that many among us would not find this quite so “understandable”.

So this is what the story boils down to. A powerful coterie of investment banks and hedge funds used hundreds of millions of dollars lobbying a compliant administration and Congress to rewrite the rules of the game in their favor. The administration, charged with being watchdogs, was staffed with people from the very industry it was supposed to police, and often chose to look the other way even as the debacle was unfolding and even as conflict of interest ran rampant. As a consequence, thousands of people lost their lives savings, and millions more will be affected by increased commodity prices, growing unemployment, and an impoverished exchequer that will have to cut back on services to the poor. When it comes to making hard decisions of cutting expenses in the budget next year, whose interests do you think it will be easier to deprioritize; those of the potential contributors to election funds, or those who have nothing to give? And as I witness this sordid drama unfold, do I have to really justify my moral outrage? The demand to blame an abstract “society” is, in effect, the demand to blame no one, to allow the perpetrators a free ride, to encourage them to do it again, and therefore to be complicit in the next scam.

“If these people are too stupid to understand what they're signing, they should stay out of the market,” say some. Great. So we are playing the blame game then. Only, we are going to blame the “stupid”. Who also happen to be the poor. It is their stupdity to blame. Case closed, let’s carry on with life.

Among other things, I do some work with an organization called the Coalition of Immokalee Workers. I visited the town of Immokalee in Florida recently to see the conditions of work there myself. Here’s some of what I saw. Workers herded like cattle onto pick-up trucks, driven to orchards where they pick fruit from the thorny, pesticide-laden trees while balanced on rickety ladders, stuffing oranges into their bags which weigh 100 pounds when full. Ten such bags – a thousand pounds – fill a bin, one bin pays $7. On the best days of the season, a worker fills 7 bins, on the bad ones, only 2. That’s a daily wage ranging from $14 to $49. That’s not all. The living quarters in town are all owned by a single family, which charges a rent that’s a per-sq-ft equivalent to what I pay in NYC. That’s not all either, but why go on when you get the picture. The point is that everything the workers do is out of “free choice”. Informed consent is the name of the game. But please, can I be permitted some outrage?

I will write my manifesto on “The Right to Outrage” sometime soon, but let me end by making a final point. Historians, writing about inequality in the U.S. today, call it the return of the Gilded Ages. But there’s a fundamental difference between that period and this one. The late 19th century was characterized by highly exploitative economic structures, a super-rich oligarchy, an incestuous relationship between big business and government, a senate that was referred to as the millionaires’ club, and a pervasive form of crony capitalism. Sounds familiar? But there was another note to that Age, one of dissent and resistance, that challenged the dominant symphony of those in power. And nowhere was it more strident than in the incipient labor movement of the time. The McCormick Strike, the Haymarket Affair, the Homestead and Pullman strikes, the Bread and Roses campaign... There was a cacophony of outrage that coalesced into a demand to change society in the name of egalitarianism and social justice. But I find myself getting restless at this current silence. Can we have some outrage, please?

*What? You didn't really think I was going to resist temptation, did you?

Panch and Lefty Talk it Out on CT

Let's take the heat off that other post for a moment, shall we?

On CT, this is what is happening:

Pancho: So what does political philosophy have to say about the banking crisis?

Lefty: Excuse me?

Pancho: Well, millions ruined, pensions and savings binned, an appeal to taxpayers to save the banks? It all seems rather, um, well distributive… I’d have thought you could give us some policy advice?

Lefty: Well I don’t really do that kind of thing, I do ideal theory.

Pancho: What’s that when it’s at home?

Lefty: I’m mainly concerned with devising optimal principles of social regulation under conditions of strict compliance, this is far too messy for me …

Pancho: Go on, have a go!

Lefty: OK well, since you insist …. Luck egalitarianism might be a good starting point.

Pancho: What’s that then?

Lefty: Luck egalitarianism is, roughly, that differences in how people fare should be consequences of their choices rather than their unchosen circumstances. People who get dealt brute bad luck have a claim not suffer on that account; whereas people who knowingly take risky gambles had better live with the consequences, whatever they turn out to be.

Pancho: Those bankers are screwed then! (And lots of other people too.)

And that's just the beginning.

Update: And since Falsie is giving me so much linklove, I feel I ought to return some of it. Go read Witch Hunt.

Saturday, September 27, 2008

Friday, September 26, 2008

Husain's Response

To the comments on the previous post, Husain responds at length. Since he doesn't have a blog of his own, and since this is so much fun right here, this is his response in full.


Husain says:

I am a little puzzled at the charge of being “partisan” or of passing “value judgments” because I am not, nor did I claim to be non-partisan or value-neutral on this issue. But perhaps I was a bit too restrained and subtle in my piece. What I really wanted to say was this: Shame on those disgusting, greedy, mean-spirited, selfish bastards for setting up a corrupt system which was designed to take advantage of the poor and the ill-informed, for making out like bandits while the going was good, and for then walking away from the loss, smugly talking about how it was the subprime borrowers’ fault that got them into this mess in the first place. Now that we’ve got that out of the way...

I shall not discuss the issue of whether my mis-spelling of Stearns takes away my right to analyze the crisis, but I will pause for a bit on the quibble with my use of “securitization”. Securitization is a fancy word for the creation of fictitious products called “securities” (which are themselves based on actual assets that are expected to generate income). This is the way the securities game was played: the get-rich-quick Wall Street crowd peddled these subprime loans that they knew very well were predatory, created a bunch of abstract securities by using the mortgage as collateral, packaged them in fancy bits called MBSs-CDOs-CMOs-whatevah, persuaded credit rating agencies to give AAA ratings to some of the securities, sold these to investors, exploited accounting loopholes to create shell companies called Special Purpose Vehicles (SPVs) in the Cayman Islands and other tax havens, and transferred the junk securities to the balance sheet of the SPVs. So by the time they were done, they had taken crappy mortgages and converted them into separate “tranches” – some became AAA securities, some lower rated ones, and some were just trash that was moved off their own books (and by the way, does anyone really believe that they did not know exactly what they were doing?). And then they did it again and again. They also gave themselves fat salaries and huge bonues (try the $490 million Dick Fuld made during his tenure as the CEO of Lehman), and engineered their own payoff in a way that allowed them to have it taxed at the 15% capital gains rate as opposed to the 35% federal income tax rate.

I agree that it is “convenient for society to blame this mess on Wall Street” but it is far more convenient to shift the blame on to “society” which should somehow “accept its own responsibility for what's happened”. What was “society’s” responsibility exactly? To divine how the opaque world of Wall Street worked? To turn away from what was being masterfully sold as a fail-safe wealth-making opportunity? To not have “voted for a government that believed in minimal oversight” (let us leave aside the fact that less than 2/3rd of the population is of voting age, half of them vote, and half of those did not vote for this administration)? This is a logic of collective punishment that also makes a scapegoat of the victim.

Agreed that it was the (very understandable) desire to make money on increasing property values that made several middle- and working-class families jump on the bandwagon. Agreed that they signed up for loans that they did not realize they couldn’t afford to pay (more on that below). Call this greed if you will, though you should keep in mind that buying a home isn’t just about upscaling your living digs from a crummy apartment to a home with a yard. Given how U.S. cities and towns are structured, home ownership is linked with access to decent schools, crime-free neighborhoods, and availability of open, green spaces.

But to equate this desire with the rapaciousness of the financial executives is a travesty. You can’t seriously believe that the “greed” of the poor who were eager to acquire homes and the “greed” of the masters-of-the-universe are equivalent, unless you truly don’t understand how power works.

Subprime lending – a fancy term for giving high-interest loans to the poor – was turned from a tiny niche in 1990 into a huge 20% slice of the market by 2006. It would take too long to list the ways in which these loans were predatory, but here are some of them. Seventy percent of these loans came with a pre-payment penalty; in other words, you were stuck with them even when you realized that you’d been duped. You couldn’t pay them off, refinace the loan, or pay on an accelerated basis. The loans were sold with teaser rates that were designed to “balloon” after 2 or 3 years and written in ways that made them appear cheaper than they turned out to be (by hiding taxes, insurance, and delaying interest payments). Worst of all, there was a deliberate effort to target buyers in poor communities through hard-selling and false advertising. Though they are being depicted as irresponsible and reckless, the subprime borrowers were – for the most part – victims of an elaborate scam.

The burden of this crisis is already being disportionately borne by those who were disadvantaged to begin with. Consider the following. In a population that is 66.4% white and 13.4% black, 54.7% of high-cost loans were given to blacks and 17.2% to whites. These numbers partly reflect the fact that black communities tend to be poorer than white communities. But there is also plenty of evidence to show that black families that could have qualified for a prime loan were steered towards and bamboozled into taking loans at subprime rates. See the report “State of the Dream” put out by United for a Fair Economy for more details.

Like I said, shame on the perpetrators of this, yes, unscrupulous scam.

P.S. This isn’t a disclaimer that absolves me of responsibility for this analysis, but I should say that I am no expert on this issue. I am eager to be educated by those who know better, but I think that the broad contours of this drama aren’t that difficult to figure out. By the way, if you want to read something I wrote on stuff I do know very well, here is my tribute to Ahmad Faraz, Pakistani progressive poet, who died recently:

P.P.S. I plan to cannibalize this for a follow up Q&A piece.

Thursday, September 25, 2008

The Idiot's Guide to a Financial Mess

[You can read parts 2 & 3 here and here.]

My friend Husain, also known as Ali Mir in other parts of the world, had posted this on Facebook and one is free to "use this in anyway you wish. No attribution necessary."

Now, I'm one of those people who could use an explanation of this kind, and I'm aware that plenty of you will know more, have more to say that will whizz over my head so I will just promise to point out comments to Husain and,

so without further ado, ladies and gentlemen........

FAQ about the U.S. Financial Crisis

If you don’t understand the financial crisis on Wall Street, don’t fret. No one does, least of all the experts. What we do know is that it is an unholy mess, which is about to get worse. Here’s my quick FAQ for those who don’t wish to wade through dense treatises on collateralized debt obligations, asset backed commercial papers, and blah-blah-blah. It’s hardly comprehensive, but it can serve as a starting point for engaging with the issues surrounding the greatest financial debacle since the Great Depression. Let me know if any of this doesn't make sense.

Do the roots of this crisis lie in the housing bubble?
The roots are all over the place (in the absence of regulation and oversight, for instance), but for the sake of simplicity, let’s say yes. After 2001, the Fed kept its interest rates low in order to increase liquidity and encourage spending. Financial institutions offered easy credit to those who wanted to borrow money to buy a house. Many who did not qualify for loans at regular market rates – the subprime borrowers – were persuaded to take out mortgages despite the fact that their income level, ability to make a down payment, and credit history made them high-risk debtors.

Why did so many borrowers take out mortgages?
As the number of buyers increased, the values of homes started going up. And as the values of homes started going up, the number of buyers increased. Everyone wanted to jump on the gravy train. In 2005 and 2006, 40% of homes sold in the U.S. were purchased as either investment or vacation homes. Financial institutions offered subprime borrowers “teaser rates” which were scheduled to go up after a period of time (these were the so-called ARMs – adjustable rate mortgages). Existing homeowners assumed that the value of their principal asset – their home – had increased (when they noticed, for example, what their neighbors’ home was selling for) and refinanced their mortgages, spending the borrowed money.

Why did the financial institutions lend so much money to these “subprime” borrowers? Weren’t they worried about defaults?
Not really. For one, most mortgage brokers do not lend money of their own; they merely collect commissions. Besides, the system is geared towards increasing revenues and profits in the short run. Bonuses are linked to current performance. But more importantly, many of these institutions were not planning to take much of a risk. Because of a lax regulatory system, these loans were allowed to be “securitized”. In other words, the rights to these mortgage payments along with the accompanying credit risks were sold to third-parties.

So the risk passed on to the third parties then?
In some cases, yes. But for the most part, these third parties cut up these securities, mixed them up, repackaged them, and sold them down the line in the form of Mortgage Backed Securities (MBS) or Collateralized Debt Obligations (CDO). There was little, if any, regulatory oversight. At each step, the parties in this chain collected profits, and believed they were handing off the risk.

What was the role of AIG?
AIG offered insurance to those who bought MBSs and CDOs in exchange for a fee. Credit rating agencies such as Moody’s and Standard and Poor’s gave a high grade to these securities, thus reducing the amount of collateral that AIG was required to post in order to demonstrate that it had the ability to make payments in case there were defaults.

I am not sure I understand.
Assume that you bought $1 million worth of securities. You are worried that the assets behind these securities are not a sure bet. So you hedge by buying $1 million insurance from AIG. If there is a default on the payment, AIG pays you your $1 million. These are the so-called “credit-default swaps”. Pay attention to that term. We will hear a lot about it in the near future. There is currently a $62 trillion (yes, that’s a trillion) market for these swaps which is absolutely unregulated.

How much is a trillion anyway? Apart from being a really large sum of money?
As figures keep getting tossed around, one begins to suffer from number fatigue. How does one make sense of these large values? Here’s one way to imagine a trillion dollars. Let’s say you have a magic machine that spits out a $100 bill every second, all day and all night long. In the first minute, you’d have $6,000. In the first hour, $360,000. In the first 24-hour day, you will possess more than $8.6 million. A year later, you’ll have a little more than $3.15 billion. In other words, it will take you and your machine more than 317 years to produce a trillion dollars.

So, back to our story. Wasn’t everyone making money?
Until a certain point in time. But as usually happens with a bubble, the quid came calling for the quo. Subprime borrowers defaulted on their loans when the higher ARM rates kicked in. Foreclosures increased, putting a pressure on the now heavily inflated home prices. Excess inventory created by builders and speculators during the boom started to mount. As prices began to deflate, owners found it increasingly difficult to refinance their homes. The MBSs were not so attractive any more.

So institutions that owned MBSs were in trouble?
Exactly. Bear Sterns was the first to crash. The Feds had to step in and facilitate its “sale” to JP Morgan at the cost of $29 billion to the taxpayers.

And why did AIG stumble?
Credit rating agencies woke up to the fact that they had assigned AAA ratings to relatively worthless securities, so they downgraded the credit of AIG, requiring it to post additional collateral. Since AIG didn’t have the billions it would have taken to do this, it had to be rescued if it was to be prevented from declaring bankruptcy.

Why would that have been such a terrible thing?
If AIG went under, all those who had hedged their bets would have suddenly found themselves in a heap of trouble. They would have most likely gone belly-up too.

So AIG was too important to allow it to fail?
That is the narrative being bandied about. But the bailout wasn’t about AIG. It was done in order to save its “counterparties”, the ones who had bought insurance.

Who were these counterparties?
We are not sure. But most of them (around three-quarters) were probably European banks.

Why wasn’t Lehman bailed out?
We don’t know. Perhaps it was the luck of the draw. It came second in line (after Bear Sterns) and maybe the government wanted to play it tough. Or perhaps its counterparties were not important enough to rescue.

What was the story with Freddie and Fannie?
Mae ‘n Mac owned or guaranteed many of the MBSs and several mortgages that were subsequently bought by foreign banks (China was a big player), who assumed that these government sponsored enterprises (GSEs) would not be allowed to fail. Since foreign funding (those trade surpluses China has with the U.S.) are essential to making up budget (and trade) deficits, the government had to step in and rescue the GSEs, lest foreign capital wander off elsewhere.

Now what?
The U.S. government is planning to bail out the financial institutions whose reckless greed produced the mess in the first place.

What if it doesn’t?
Financial institutions devastated by this crisis have very little capital to lend. Without the credit that they provide, the economy will suffer. How much is unclear, but the impact is likely to be quite severe.

What does the administration want?
The Treasury secretary is asking for unfettered access to $700 billion in order to buy any asset from any institution at any price he thinks is right. Further, the Secretary says that his decisions will be “non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.” The government plans to buy up the MBSs at a price it determines (critics worry that lobbyists of the financial institutions will play a role in this), thus freeing the institutions to infuse credit into the markets.

Who will foot the bill?
Ordinary citizens – the taxpayers – who will see a skyrocketing deficit, and most likely, shrinking investments in public goods, dwindling retirement accounts, and greater inflation.

Is there any alternative?
If it doesn’t want to think outside the box (and it is clear that it doesn’t), the least the government should do, in my opinion, is to demand an ownership stake in the companies it bails out. That way, if they recover, the bailout money can be returned to the treasury. The current plan only rewards those who drove the economy into the ground, and who made a lot of money during the good times.

So one final question. Was the crisis primarily caused by irresponsible borrowers who took on loans that they did not have the ability to repay?
No. It’s true that defaults on mortgage payments, especially in the subprime segment triggered this crisis-in-waiting. It is also true that borrowers, both prime and subprime, failed to read the fine print, took out larger loans than they could afford to repay, and got carried away by the thought of buying property that was supposed to keep increasing in value. But the subprime loans were pushed by an unscrupulous industry, which preyed on a population that did not have the wherewithal to figure out the swindle before it was too late. A lot of educated, middle-class Americans lost out too, but the subprime crisis represents the greatest transfer of wealth from the poor to the rich in recent times, and the greatest loss of wealth for communities of color in the post Civil War period.

Tuesday, September 23, 2008

Discovering Captain Underpants

[Since I'm dedicating practically every post to someone I may as well continue until something else happens. This one is for KM.]

No, don't get the earbuds; I said Captain Underpants. And Super Diaper Baby.

A few years ago, I found out about this wonderful new superhero from a friend whose nephews were crazy about him. Then one day, I saw the first three books in the series in a bookstore and quickly bought them. Another time, the whole series was available in a secondhand place where I'd bought some fantastic kiddie books (that's another post) but I didn't have money and the next time I saw they were all gone.

Briefly (ha ha), this is the story: George and Harold are two regular kids who hate school and whose school Principal hates them. The love to draw comic books and their hero is Captain Underpants (the school Principal, Mr. Krupp in his superhero avatar) who always saves the day clad only in his super-soft, unstarched underpants. The starch is important: it is the only thing that destroys his super powers.

My son loves these books. He giggles and chortles and both of us have read every book until Captain Underpants and the Big, Bad Battle of the Bionic Booger Boy Part 1. These books have taught him the words 'bionic' and 'wedgie'. Very useful words to know.

(This horrifies my grandmother.)

There's a website.


Saturday, September 20, 2008

Spaniard Goes to a Birthday Party

Because Veena wants to know what could preoccupy me more than the woes of iBankers

I am happy to report that my son has reached the age when he no longer needs me around at birthday parties. I am sorry to report he counts among his classmates folks who live in small palaces and it would be a crime not to sit through three hours of a birthday party and check out what happens.

What follows is entirely my fault. Waste no sympathy on me, Falsie. (And nobody mention tea, please).

This place we're going to is in a lane that's named after the scion of the family whose great-granddaughter we're going to hand over a gift to. This is the first time I'm going, so I only have my mother's directions to help me along.

"Turn into the lane after the petrol pump. It's the first house on the right."

I turn into the lane. There are tall buildings a mouldy wall but nothing that looks like a house. Then there are balloons. Behind the balloons, a large circular driveway. A fountain perched atop a few statues of semi-clad women. Other statues placed casually here and there. On our right is the 'house': sweeping steps, whitewashed building like the ones in paint ads, with old-fashioned green trim on slatted windows.

"Where can I park," I ask my host.

"Oh, anywhere," he says, with a generous wave of the hand.

There's a music system playing 'Hips Don't Lie'. This party is going to be fun.

My son runs off to play and I join a bunch of mothers. Now, since my son goes to school by the bus, I don't know what these mothers look like, much less know their names or anything about them. But I join them and listen.

While a troop of women - maids by their slightly worn clothes and their dupattas tied around their waists like girls going to bharatanatyam classes - ply us with Frooties and chips and samosas, the women talk school and check out attire. I hide my very torn fingers from general view. These women are, if not desperately well-groomed, at least dressed as if they've made an effort.

Meanwhile, the kids are running wild. There's plenty of place: a seesaw, a slide and a couple of swings, and plenty of trees and low walls.

Someone wants to know - she asks a Bong, naturally - where one can find Dhakai saris in Hyderabad. I'm all admiration for this lady. She's dressed in back, has on a matching pair of dark glasses (which means black, let me specify, with white stripes on the handle or whatever), and in the space of one minute has spoken in Hyderabadi Hindi, Telugu and Bengali.

Someone organises the kids and starts a game. They are all given paper and pencil and are given a picture. They have to find 13 words in the picture that have a double-'o'. "Like this is a football," the grandmother says.

Mother Alert! Some of the moms rush to their kids and help them out in loud whispers. After time's up, one or two (mothers) are still copying down words from other kids' sheets. My son has written the word spooky. Now, that's clearly disallowed, because it's not an object in the picture, which is what he was supposed to find. "Where's Spooky?" one mother asks me. I shrug.

The next game is rather fun. The kids are given a piece of paper with an animal's name on it and they have to find other kids in 'their' family by making a noise the animal commonly makes. No one is interested in finding anyone else, but everyone has a good time mooing and bleating and making the bloody kind of racket they're not allowed to at home.

Someone asks, over the noise, whether I also have a problem with my son not wanting to write. "I don't know," I say. I'm a careless mother like that.

"I'm looking for a cursive writing class for my daughter. Can you believe they haven't started teaching them cursive writing yet?!" The conversation moves to all the available extra-curricular activities these kids do: theatre, tennis, abacus classes and kathak, apparently, are all good.

A little later, once the animals have found their families, a game of musical chairs begins. This is really interesting to watch. I didn't realise until today what a conservative game it was. These eight year old kids already know caution: as the music starts, instead of running along they are walking cautiously, moving the chairs just a little bit so they can slip through the gap to the chair that faces the other way, if the music should happen to stop. They linger near chairs, listen to the beat and make intelligent guesses based on how long the music played one time and how long they thought it would be before it stopped the next time. Very illuminating.

Lunch - after the cake was cut - was pani puri, more samosas and veg manchurian and noodles. The maids had arranged themselves behind a long table and were serving everyone. As I sat some way away, I noticed one of them slide gracefully into a faint and fall under the table. A lid went clattering. Someone brought her some water. Others hovered. She continued to sit under the table for a good long while, covering her face with her hands. A girl behind me said 'fuck' and suddenly started talking in whispers.

In a while, the return gifts came out.

It wasn't until I was home, though, that all those samosas and pani puris started waging war in my stomach.

There's another invitation for a birthday party tucked into my bag somewhere. It's in Nallakunta (the party; not my bag). I am so not going.

Friday, September 19, 2008

the robin and the worm

for BM


the robin and the worm

a robin said to an

angleworm as he ate him

i am sorry but a bird

has to live somehow the

worm being slow witted could

not gather his

dissent into a wise crack

and retort he was

effectually swallowed

before he could turn

a phrase

by the time he had

reflected long enough

to say but why must a

bird live

he felt the beginnings

of a gradual change

invading him

some new and disintegrating


was stealing along him

from his positive

to his negative pole

and he did not have

the mental stamina

of a jonah to resist the


process of assimilation

which comes like a thief

in the night

demons and fishhooks

he exclaimed

i am losing my personal

identity as a worm

my individuality

is melting away from me

odds craw i am becoming

part and parcel of

this bloody robin

so help me i am thinking

like a robin and not

like a worm any

longer yes yes i even

find myself agreeing

that a robin must live

i still do not

understand with my mentality

why a robin must live

and yet i swoon into a

condition of belief

yes yes by heck that is

my dogma and i shout it a

robin must live

amen said a beetle who had

preceded him into the

interior that is the way i

feel myself is it not

wonderful when one arrives

at the place

where he can give up his

ambitions and resignedly

nay even with gladness

recognize that it is a far

far better thing to be

merged harmoniously

in the cosmic all

and this comfortable situation

in his midst

so affected the marauding

robin that he perched

upon a blooming twig

and sang until the

blossom shook with ecstasy

he sang

i have a good digestion

and there is a god after all

which i was wicked

enough to doubt

yesterday when it rained

breakfast breakfast

i am full of breakfast

and they are at breakfast

in heaven

they breakfast in heaven

all s well with the world

so inten was this pious and

murderous robin

on his own sweet song

that he did not notice

mehitabel the cat

sneaking towards him

she pounced just as he

had extended his larynx

in a melodious burst of

thanksgiving and

he went the way of all

flesh fish and good red herring

a ha purred mehitabel

licking the last

feather from her whiskers

was not that a beautiful

song he was singing

just before i took him to

my bosom

they breakfast in heaven

all s well with the world

how true that is

and even yet his song

echoes in the haunted

woodland of my midriff

peace and joy in the world

and over all the

provident skies

how beautiful is the universe

when something digestible meets

with an eager digestion

how sweet the embrace

when atom rushes to the arms

of waiting atom

and they dance together

skimming with fairy feet

along a tide of gastric juices

oh feline cosmos you were

made for cats

and in the spring

oh cosmic thing

i dine and dance with you

i shall creep through

yonder tall grass

to see if peradventure

some silly fledgling thrushes

newly from the nest

be not floundering therein

i have a gusto this

morning i have a hunger

i have a yearning to hear

from my stomach

further music in accord with

the mystic chanting

of the spheres of the stars that

sang together in the dawn of

creation prophesying food

for me i have faith

that providence has hidden for me

in yonder tall grass

still more

ornithological delicatessen

oh gaily let me strangle

what is gaily given

well well boss there is

something to be said

for the lyric and the imperial


believe that everythign si for

you until you discover

that you are for it

eing your faith in what you

get to eat right up to the

minute you are eaten

for you are going

to be eaten

will the orchestra please

strike up that old

tutankhamen jazz while i dance

a few steps i learnt from an

egyptian scarab and some day i

will narrate to you the most

merry light headed wheeze

that the skull of yorick put

across in answer to the

melancholy of the dane and also

what the ghost of

hamlet s father replied to the skull

not forgetting the worm that

wriggled across one of the picks

the grave diggers had left behind

for the worm listened and winked

at horatio while the skull and the

ghost and the prince talked

saying there are more things

twixt the vermiform appendix

and nirvana than are dreamt of

in thy philosophy horatio

fol de riddle fol de rol

must every parrot be a poll


from Archy and Mehitabel, Don Marquis. Previous post here.

Wednesday, September 17, 2008

It Was 60 Years Ago Today

One of the most fascinating chapters in recent history is the sequence of events that led to the integration of the Nizam’s state of Hyderabad with the Indian Union. It’s odd that in all the years I’ve lived in Hyderabad, it never occurred to me to ask what precisely its 400 year old history was. Talking recently to a friend, a 70 year old gentleman whose family held various semi-official positions during the Nizam’s time, it occurred to me that the generation that lived through what is euphemistically called The Police Action of September 1948*, will soon no longer be able to share its stories.

Roughly, this is what happened. A whole year after Indian Independence, the fate of Hyderabad was still undecided. In November, the Indian Government had persuaded the Nizam to sign the Standstill Agreement, which gave him a year before he had to choose between accession and war (though the British Government had stated that all princely states could choose either to join India or Pakistan).

The Nizam, Mir Osman Ali Khan, wealthy beyond belief and famously parsimonious,** had no idea what he wanted to do. Ideally, he would have liked the State of Hyderabad to be entirely Independent but this was something the British flatly refused to consider. He had to choose and it was a hard choice to make.

Sardar Patel, whose task it was to persuade the princely states to join India, had no intention of letting Hyderabad become a part of Pakistan; to have a large portion of the Deccan belong to another country – a newly created and hostile one at that – was simply not an option. Patel sent K M Munshi, freedom fighter, confidant, fellow-Gujarati (and – though this was slightly relevant in that it indicated his position on the political spectrum - founder of the Bharatiya Vidya Bhavan), as Agent-General to the state of Hyderabad. For ten months, Munshi tried to persuade the Nizam and his Prime Minister, Laiq Ali Khan, of the wisdom of joining India.

Hyderabad, at the time, was curiously divided: there were the usual communal tensions that affected the rest of the sub-continent before, during and after Partition; the Razakars, led by Qasim Rizvi (a man who was usually described as ‘charismatic’), became an informal private army to the Nizam, and terrorised the Hindu population. Simultaneously, the The Telangana Rebellion – where farmers of the Telangana region were led by the then undivided CPI in an armed rebellion against the Nizam in order to obtain the redistribution of land – threatened the tenuous stability of the State of Hyderabad. Daily life, in the one year since Independence and the ten to eleven months since The Standstill Agreement, was uncertain and full of strife.

In August, when it became clear that India would not countenance an Independent Hyderabad or one that was a part of Pakistan, the Nizam began to simultaneously move his assets out to England*** and prepare for war.

July and August 1948 was a period of high intrigue, with spies and secret informants from the Nizam’s army****, aircrafts flying out in the dead of night, bounties and rewards offered. Frantic phone calls and telegrams flew between Munshi and Patel. These are excerpts from Munshi’s diary of the time*****

August 31, 1948:

Have sent a wireless to Sardar pressing for early military action, if not, at least for the complete sealing off of Hyderabad.

The Nizam’s Legislative Assembly started yesterday with all the pageantry of an independent parliament.

September 2, 1948:

Brown of the Daily Telegraph has sent a most vicious telegram about the situation comparing India with Nazi Germany, me with Ribbentrop and Hyderabad as the happy land of peace.

September 4th, 1948:

Very much perturbed at the excellent international propaganda which Hyderabad is conducting.

September 5, 1948:

Laik Ali’s speech delivered yesterday is a declaration of independence. Though couched in polite terms there is a note of defiance throughout. Evidently, he is smarting under Sardar’s comparison of the Hyderabad delegation [to the UN] with the Zamindars of Madras.

September 7, 1948:

Panditji announced in Parliament the final demands made on the Nizam: (a) banning of the Razakars, and (b) reposting of army to Secunderabad.

At 4pm the Nizam signed a mobilisation order,

Later, another wireless from the States Ministry about the incident near Kodada. Indian Army men have been captured by some men of the Nizam’s Army and the Razakars. Sent a protest to Laik Ali at 9pm.

September 8, 1948:

Hyderabad is in a panic.

On 13th September 1948, the Indian Army entered Hyderabad territory. Operation Polo had begun. In five days, the Nizam’s army and the Razakars, were routed and at 4pm the Nizam sent for Munshi, indicating the Laiq Ali had resigned and he himself was ready to surrender. In his broadcast that evening, the Nizam said he had ‘ordered a ceasefire to [his] troops’, banned the Razakars and allowed ‘the Indian Union to occupy Bolarum and Secunderabad.’ Later, on the 22nd, in an address to the Muslim Nations, he gave the world to understand that he had been put upon and had the Laiq Ali Ministry thrust on him; that he was helpless to prevent the excesses of the Razakars; that though he was a Muslim, his ‘ancestors never made any difference between the 86% Hindus and the 14% Muslims in the State’.

It took one day for Major-General J.N.Chaudhury to reach Hyderabad (he had to get past the mines that had been salted around the city; the person who was responsible for it said that he didn’t have a map of the mines and so had to lead the surrendering contingent past the mined area as punishment). On the 18th, At Hyderabad Army surrendered, though the Nizam had already done so publicly on the 17th.

There was looting and rape and the Indian Army’s hands were not especially clean at the end of it – whatever Munshi’s memoir says (Munshi’s memoir is by turns pious, self-serving, gossipy and illuminating. It is essential reading.)

Hyderabad was now a part of India. Eight years later, with Potti Sriramulu’s agitation for the reorganisation of states into linguistically determined entities, the Hyderabad of the Asaf Jahi dynasty ceased to exist: the Marathi, Kannada and Telugu speaking regions were reorganised, with Hyderabad City becoming the capital of Andhra Pradesh. The Telangana movement was postponed for five decades.


*The police had nothing to do with Operation Polo; the Indian Army, led by J.N.Chaudhury, invaded the Nizam’s territories and the Nizam finally surrendered on the 17th of September, 2008 – 60 years ago today.

**One story goes that he refused to have his private rooms dusted. This way, he would know if any article of vertu precious to him went missing. Another story alleged that the money he received on his birthday – which the Nizam traditionally touched as a mark of acceptance and returned – he kept.

***A battle to recover these assets is still being fought in the courts, with both India and Pakistan claiming ownership of the money.

**** The ‘Sound Silent’ of the Nizam’s Army, it turned out, was one Reddy who knew what the Indian Army was trying to do and fed it exaggerated reports of the Hyderabad Army’s strength, with the consent of Major-General El Edroos.

***** from The End of an Ear: Hyderabad Memoirs. K.M.Munshi. Bharatiya Vidya Bhavan. 1957.

Other essential reading/viewing:

From Autocracy to Integration

Gautam Ghose’s Maa Bhoomi

Tuesday, September 16, 2008

things that make you go...ew!


A word I encountered with disbelief in 2004 when a yoga teacher I knew extolled the virtues of this new discipline, which I had never seen her demonstrate.

Turns out it's a trademark whadoyoucallit.

But doesn't it just make you feel sick? Such an unaesthetic word: yogalates. Waiter! There's a sun salutation in my coffee!

Oh, and listen to how they end a class:

At the end of each Yogalates session we finish traditionally by all repeating the Sanskrit word NAMASTE ……..which is a greeting used in India and Nepal. It has many definitions the more common one being “The Divine in me recognises the divine in you”……………Mutual respect is acknowledged between the teacher and student.

Hyuk hyuk.

Oh and someone please tell me what the other definitions of 'namaste' are.

Sunday, September 14, 2008

what a weekend it's turning out to be

First the Delhi blasts (does anyone really need links?) and now David Foster Wallace.

Part of it has to do with living in an era when there's so much entertainment available, genuine entertainment, and figuring out how fiction is going to stake out its territory in that sort of era. You can try to confront what it is that makes fiction magical in a way that other kinds of art and entertainment aren't. And to figure out how fiction can engage a reader, much of whose sensibility has been formed by pop culture, without simply becoming more shit in the pop culture machine. It's unbelievably difficult and confusing and scary, but it's neat. There's so much mass commercial entertainment that's so good and so slick, this is something that I don't think any other generation has confronted. That's what it's like to be a writer now. I think it's the best time to be alive ever and it's probably the best time to be a writer. I'm not sure it's the easiest time.

From the Salon interview.

Update [16th Sept.]: The Ziegler revenge. [Via] Perhaps I need to add that I think Ziegler's piece is pretty vile. Do read the Valve post linked alongside.

Thursday, September 11, 2008

This Day That Year

Where were you when Kennedy died is a game the previous generation liked to play. Ours might ask a different question.

On that day - that night, here - I was in my room here, in Hyderabad. I had returned home, temporarily as I thought but permanently as it turned out. There was no electricity. I was reading by the light of a candle. My year-and-some old son was somewhere, perhaps with is father in another room.

The atmosphere was fraught. There's no other word for it. Earlier that day, we realised that there was no saving the marriage. But he was here, where the parents were, and there was no way to say what needed to be said while keeping those who were not involved with the marriage out of it for the moment. And there was the kid. That was also, though I didn't know it then, the beginning of my father's downward spiral.

That night, I was reading The Blind Assassin. I remember this clearly, and I remember crying silently so no one would notice. I don't remember the passage and frankly, it doesn't matter.

This was my watershed and it had nothing to do with what was happening on the other side of the world. The phone rang and someone told us what had happened. Naturally, there was no way of watching it right then.

The next morning, unusually for us, we turned the TV on as soon as there was electricity. The destruction was spectacular and it so exactly expressed my sense of doom. This is what it looks like when the world comes crashing down around you. Now I knew.