Raghuram Rajan: What he said, really meant and definitely didn’t

Raghuram Rajan

What he said:

“A 007 James Bond image is very dangerous for a central banker to have.”

Rajan added:

“…the RBI  is being managed well. I have spent a lot of time watching the system and thinking about it from my 2008 report to my stint as an adviser to the Prime Minister and as the chief economic adviser.
There are a lot of things I know can be done. I am trying to push to get those things done sooner rather than later. There is tremendous amount of work inside the RBI on doing things, not just by me but my predecessor, Dr Subbarao. I don’t want to take that James Bond (image). But, a banker on the move — I will take that.”

What he really meant:

“I’m licensed but not to kill. I cannot appear to be running the RBI like a bull in a chinaware shop. Everything has to be planned and methodical. Nothing should be left to chance. I cannot be unpredictable or appear to be so. My very demeanor and presence should reassure my constituents.”

What he definitely didn’t:

“Bonds, equity, cash…I’ll take whatever image comes with that. You may even call me Goldfinger.”



Things To Remember About Earned Value Methodology – II


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In my last installment, I introduced EVM as a method of tracking the progress of a project.

I introduced a few terms namely:


Now, before using EVM , you first need to put in place a structure so that Earned Value Methodology can be used.

This is relatively simple if you are familiar with breaking down your project into products and/or work packages, work packages that can be broken down into its component parts.

This procedure is called creating a Work Breakdown Structure (WBS). You then make a list of the activities that produce the products and sub-products. This post will not go into the details of creating a WBS. That can be the subject of another post.

Quote of the day:
If everything seems under control, you’re not going fast enough – Mario Andretti

Things To Remember About Earned Value Methodology – I


Once you have gone about and drawn up a schedule for your project and allocated resources to your project, assuming you have done your homework, you should ideally execute your plan and have everything done by the planned date, with the budgeted cost and execute the planned scope per the expected quality. (Its about scope, cost, time & quality  and a quality product needs a quality plan and I’m not talking just testing plans and/or testing for quality, but the project plan itself should be of the highest quality.)

But its not an ideal world and you have to track your project cost and progress to make sure that you are on the right track.

Quote of the day:
I’m kind of jealous of the life I’m supposedly leading. – Zach Braff

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Theory of Constraints

Theory of Constraints (TOC) gets its name from the fact that all enterprises are constrained by something. If they weren’t, they could grow as large and as fast as they wanted. But one has to monitor Wall Street or Main Street for only a moment to know that for the vast majority of enterprises growth is really hard. Constraints are why.

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Competitive Analysis

Eset Mobile Antivirus

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My individual project on Competitive Analysis for an Value Added Reseller (VAR) of Anti-Virus Software specifically ESET’s NOD32.

The company is a Cyprus based reseller named ADAOX.

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The Balanced Scorecard & Project Management

I have just finished reading a book on Project Management titled The Project Management Scorecard: Measuring The Success of Project Management Solutions by Jack J. Philips, Timothy W. Bothell & G. Lynne Snead.

Once we assuage our conscience by calling something a "necessary evil", it begins to look more and more necessary and less and less evil. –Sydney J. Harris, journalist (1917-1986)

The  idea of a scorecard to track management practices, their results and continuous improvement in a closed loop system is not novel to me.

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Capitalism: Its Two Variants

A vector image of :Image:Capitalismlogo.

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There exist 2 variants of capitalism: Individual Capitalism and Communitarian Capitalism.

Individual Capitalism is epitomized by the United States. Japan , at the other extreme, exhibits a form of communitarian capitalism.

The 2 tables below outline the differences between the 2 systems.





How to optimize the performance of a system: Cooperation at all levels will optimize the system. Competition at all levels will optimize the system.
The key driving force in the economy: The desire to build for the future. The desire for current consumption and leisure.
Motivation for work: Work provides utility. Individuals live to work. Work provides disutility. Individuals work to live.
Responsibility for skills and training prior to employment: Responsibility of society. Strong high schools and apprenticeship programs. Responsibility of the individual beyond relatively weak high schools. Few apprenticeship programs.
Relationship between government and business: Government supports and cooperates with business to optimize the system. Government regulates business to promote competition. Click for Summary of the 2001 and 2005 ASCE Report cards on U.S. Infrastructure.
Government policy: Promote growth in supply. Promote growth in demand.






Dominant objective and focus: Building for the future with long term focus. Profit maximization with short term focus.
Organizational Structure: Horizontal, flat or lean with relatively few layers of management. Bottom up consensus decisions. Vertical with many layers of management. Top down autocratic decisions.
How profits are used: As fuel to keep investing and building. To increase consumption and leisure for stockholders.
Hierarchy of organization’s constituencies: 1. Employees
2. Customers
3. Stockholders
4. Suppliers
1. Stockholders
2. Customers
3. Employees
Employment and job security: Lifetime employment promotes bonding. Uncertain employment discourages bonding.
Responsibility for training after employment: Companies provide cross training and job rotation. Individuals are mainly responsible for their own skills.
Route to management: Long multi-function internship. From college, to single function specialization, to management.
Management attitude toward teamwork: Teamwork and cooperation are essential for optimizing the system. Teamwork is risky. Individual performance will optimize the system.
Management behavior in economic recession: Cut:
1. dividends
2. management compensation.
3. workers pay and jobs as last resort.
1. workers pay and jobs
2. management compensation.
3. dividends.
View of leadership: A leader manages processes or work. A leader manages results.
Management attitude toward problems: Understands the variability within the system and tends to blame the system first. Specialist has less understanding of the system and tends to blame employees.
Tools of management: Employee empowerment, group praise and profit sharing. Statistical control. Managers facilitate, counsel, teach and provide resources. Management by objectives, merit ratings, incentive pay, quotas, standard rates and quantities, piecework and annual ranking of employees. Count results.

So where do you think BRIC/BASIC countries place themselves?

Source: http://maaw.info/Chapter1.htm#FRAMEWORK:%20TWO%20GLOBAL%20VARIANTS%20OF%20CAPITALISM


Six guidelines for making grounded money decisions

Here are six guidelines that will help you keep your limbic system and your money separate so that the lizard in you does not get to make your money decisions.

  1. Avoid making important money decisions when you are emotional. Heightened emotion –– good or bad — narrows your perspective, cuts you off from your sense of the big picture and makes it more difficult to logically see long-term consequences of your choices.
  2. Avoid making important money decisions under tension or fatigue. Increased tension produces emotional regression with increased tension and advanced conflict. The stress response reaction can move someone into a more emotional pattern characteristic of a much earlier age. The same holds true for fatigue. Take important decisions after tensions have calmed and you are rested.
  3. Be willing to sleep on it. There are few true emergencies in life. Investing isn’t one of them and neither is buying that plasma television. If it is a good decision today, it will be a good decision tomorrow after you’ve had the state change and perspective of sleeping on it.
  4. Have a well-informed and fully structured plan. Look at the big picture and your long-term objectives and create a strategy and game plan based on facts rather than on emotions or instinctive reactions.
  5. Stick to your plan especially in times of doing extremely well and feeling euphoric. Stick to the plan. Get your excitement and take your risks in areas other than finance.
  6. Worry about the right things. Decide what you can control (your plan, your actions, your decisions) and what you can’t (market conditions,external events) and put all your effort, energy
    and focus into those things you can affect. When things happen that are beyond your control and that you cannot determine, stick to the plan.

Source: BizSum’s Lite Summary of The Secret Language Of Money
How To Make Smarter Financial Decisions and Live A Richer Life

By By David Krueger, M.D. with John David Mann , McGraw Hill, 2009


I’d rather be a climbing ape than a falling angel. -Terry Pratchett, novelist (b. 1948).