Archive for January, 2009

Another Frenchman …

Posted on January 26, 2009. Filed under: Guide Posts, The French Contribution |

Antoine de Saint-Exupéry was a well known writer and aviator well known for his books about aviation adventure. Extracts from his thought …

The one thing that matters is the effort. True happiness comes from the joy of deeds well done, the zest of creating things new. It is in the compelling zest of high adventure and of victory, and in creative action, that man finds his supreme joys.

How could there be any question of acquiring or possessing, when the one thing needful for a man is to become – to be at last, and to die in the fullness of his being.

 I have no right, by anything I do or say, to demean a human being in his own eyes. What matters is not what I think of him; it is what he thinks of himself. To undermine a man’s self-respect is a sin.

He who has gone, so we but cherish his memory, abides with us, more potent, nay, more present than the living man. 


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The Mighty Seabiscuit !

Posted on January 25, 2009. Filed under: Movies, Personalities, Sports |

Actual footage below:

Click here to see: Seabiscuit vs War Admiral – 1938 Match race

Click here to see: Seabiscuit wins the 1940 Santa Anita Handicap

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Genesis … of the US Finance Crisis ..

Posted on January 24, 2009. Filed under: Business |

The US housing boom, occurred around 2001-2005 and house prices rose by 124 percent between 1997 and 2006. To make the most of the consistently escalating prices the sub prime borrowers, who had a poor credit score saw an opportunity. A bank product, which became a rage was Option ARM, pioneered by World Savings Bank, run by the Sandlers. This sub prime mortgage market shows the intense drama of a lending operation gone berserk. 

Optional Adjustable Rate Mortgage, usually has 5% (or lower) of the home value as down payment and interest alone payment (or even a lower payment). Making such minimum payments would result in an ever increasing outstanding loan amount resulting in the “principal” growing large, ie “negative amortization”.

One of the main USPs of this miracle loan is the fact that you can pay the low minimum payment in the first year, at an interest rate as low as one per cent, and for a few years the monthly payment rises by only 7.5 per cent. The flip side for those choosing the minimum payment option is that after the introductory period, their monthly payment will suddenly double or increase even further.

This happens after the introductory period of about 5 years, the monthly payment gets “recast” to adjust the amortization to its full limits. The monthly payments will then be recalculated at the prevailing interest rates for the remainder of the loan tenure. The outstanding loan exceeds a negative amortization maximum, when it is about 125 per cent of the original loan amount. If the balance hits this limit, which can happen before a period of 5 years, when interest rates rise, the payment is increased to its full amortization level. Both the recast clause and the negative amortization cap can result in a rude “payment shock”.

An example of the Option ARM; $500,000 loan, 1.5% start rate, 2.80% margin over cost of funds, 11.95% lifetime cap, 125%/10-year reset cap The minimum payment is based on the 1.5% start rate, and changes +/- 7.5% per year. In this example, the minimum payment is: 1st year – $1,725.60; 2nd year -$1,855.02, 3rd year – $1,994.15,4th year – $2,143.71,and so on. However the fully-amortized payment on the $500,000 is $3,296.35. This means that during the initial years, the principal gets larger and larger.

When the loan balance reaches 125 per cent of the original loan amount, the loan resets, causing the monthly payment to more than double as now the amount owed is much larger and the payment needs to be increased to a level, which enables the principal to be paid off.

Right from the early days of Option ARMs, it was clear that borrowers would not be able to afford the monthly payments once the loans reset, however banks made these loans in the hope that housing prices would continue to increase rapidly.

As long as housing prices rose, borrowers could sell their houses for a profit before their monthly payments were increased and pay back the bank, thus making a healthy profit for both the bank and the borrower. However once housing prices started to stagnate, borrowers were stuck in houses that they could not afford to keep but could not sell either. This is when the US housing bubble started to burst.

When the real estate markets crashed, many banks had to declare bankruptcy. Two noteworthy examples of such lenders include Wachovia Corporation and WaMu (Washington Mutual). The former acquired the bank from World Savings, which was earlier run by the Sandlers, who pioneered the attractive loan product Option ARM.

By the time Wachovia bought over World Savings, the days of profitability were being counted and when Wachovia demanded more growth noticing the slackening market, an aggressive and indiscriminate selling of the loan product led to a sudden surge in the lending figures.  The sale of this product increased dramatically and the year 2005 recorded $238 billion made in option ARM loans nationally, out of which World Savings issued about $52 billion!

When the market crashed subprime borrowers felt cheated and argued the logic of such a lending product, while the Sandlers who pioneered the concept kept saying in their defense that if only the market prices did not crash, the scenario would be the exact opposite.

WaMu on the other hand was promoting their loan shop aggressively and one notable ad campaign they ran was the “Power of Yes” campaign, which practically sums up their loan business model. They said yes to every loan purchase inquiry, without conducting a stringent quality check on the loan consumer’s ability to repay the loan. In the bid to make the most of the real estate boom WaMu started ignoring even the basic eligibility factors like the compatibility check between loan and income.

There were examples of people claiming salaries that were ridiculously high for their professions. A popular newspaper in the United States , cites the incredible example of a “Mariachi Singer” ( a profession that one usually did not hear of) getting a loan approval and the documented proof for her profession that went into her file, was a photograph of the singer in her mariachi outfit! It’s no wonder then that when the real estate markets crashed. WaMu eventually had to shut down its sub prime lending operations, recording a $67 million loss in 2007.

Then the Flood … courtesy the genius and creativity of the ‘Finance Geniuses’.

The traditional mortgage model involved a bank originating a home loan to the borrower and retaining default risk. This, however, restricted the lending ‘ability’ of the banks as they had to maintain a certain capital ratio. To circumvent this, banks switched to the ‘securitization’ model in which mortgages of varying hues, some low risk and some high risk, were lumped  and created ‘Mortgage Backed Securities’ or MBS’s, which were then sold to investors and finance institutions, thereby freeing the Banks capital and enabling it to lend more and more. And now enter the Credit Rating Agencies, which too cooperated and provided High Credit Ratings to these instruments.

To further confound matters, the debt associated by the origination of these securities was placed by major banks  in off balance sheet entities called ‘structured investment vehicles’ or ‘special purpose entities’. Most banks had borrowed heavily and invested in MBS’s on the premise that the housing market could continue to spiral. Many banks further securitized these and sold them in the secondary markets. Hence by the time they reached the last investor, they had been packaged and repackaged so many times that no one could unravel them to trace a mortgage back to its original borrower.

The house of cards fell when the housing market stopped rising and the Fed began to raise interest rates. Mortgage payment defaults started the crash which gained momentum with the loss in value of the MBS’s. The 10.5 billion$ write down by HSBC was yhe first of the major CDO (know what this is? … Credit Default Swap! …  shows creativity at its zenith)  or MBO loss to be made public. The month of Sep ’08 saw the ‘Top 5’ of Wall street succumb.

The fall of Wall Street  impacted Main Steet and hence the throes of this economic depression.

The irony? … the same guys who were responsible for the mess, are now calling the shots to get the US, and indeed the world, out of the mess they themselves created.

The Lord have Mercy!

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Eye Color and Temperament …

Posted on January 17, 2009. Filed under: Personal Magnetism, Personalities |

There is a deep connect between the ‘inherited’ temperament and the color of one’s eyes. However it is easy to acquire the exact opposite temperament vis a vis acquiring other characteristics.

The color of the eye is shown by the iris, which is the colored circle surrounding the black pupil and is itself surrounded by the white, or cornea, of the eye.

The pupil is actually a dark hole and hence it is black but it expands and contracts depending on outside influences like light and internal moods like excitement and passion. To see the area at the rear of the eye, doctors expand this pupil and thus are better able to see the inner state of the eye..

Usually calmer the person, the smaller will be the pupil. But when feelings and passionns are aroused, the pupil expands and at times nearly covers the whole  iris – and this in even bright sunlight. Here the inner power overpowers the outer conditions.

The iris has four main colors. It is either ‘grey’, ‘blue’ or ‘brown’ whiich itself covers a broad range from the light hazel to the dark brown black…

The blue eyed person, when in the brighter moods, is light, happy, cheerful, brilliant, active and even effervescent. However when the negative moods prevail,, the blue eyes become cold, the nature revengeful, the plans furtive and the mind unreasonable in its demands.

The grey eyed person, is cool, calculating, steady in nerve and unflinching in muscle. He talks but little when a purpose it at stake and looks you coolly in the eye when you address him/her. You feel compelled to do all the talking and he does not assist you by word or nod.

His face never relaxes into an assent and you keep on thinking of new ideas and expressing them in the hope that you will be rewarded by some show of acquiesceance.

Meanwhile he is looking you steadily in the eye. A stupid person may seem to do this but stufpidity relaxes the muscles of the jaw and draws down the face into a look of perplexity.

Brown eyes embrace a score of shades from a light hazel (akin to the blue) to the dark brown black.

The brown eyed person, which means the color is in between light and dark, when positive is affectinate and rich in the expression of energy but finds it very difficult to hold to a steady purpose unless trained by fixed habits of living.

The dark brown eyed  person is dangerous and deep. When positive, the nature, the eyes, the expression, the grasp, the very presence suggest warmth. When negative, there is a nervoous irritibiltiy which jars upon the nerves of all who are near.

We must remember that all spontanious expressiins of energy come from inherited temperaments.

All deliberate exhibitions of energy come from acquired temperaments.

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Body Language II … the ‘eyes’ …

Posted on January 15, 2009. Filed under: Personal Magnetism |

The eyes indicate mental activity. This is depicted mainly by the positions of the eyelids.

The lower lid, has two main positions, apart from the normal.

Note that when a person holds an opposite opinion or is analyzing you, he/she will always raise the lower eyelid; It indicates analysis and scrutiny.When the lower lid is brought inward ie towards the nose, it shows antipathy and an intention to combat you to the finish.


The Upper Lid has a range of positions indicating a gamutt of mental activity.

If the upper lid touches the top of the iris, it shows that the mind is very attentive.
If there is a thin white line visible above the iris, then it shows that both the mind as well as the feelings have been aroused; A wider white line between the iris and the lid, shows extreme fear, horror, insane ecstasy and the like.
If, however, the upper lid is lowered and the eyeball is turned upward, then the mind has ceased to work and is inattentive.


YUL BRYNNER, the powerful actor was famed for conveying his unsploken  thoughts by a mere change in the position of his eyelids.His eyes conveyed more than his words.

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Lord Byron …

Posted on January 12, 2009. Filed under: Guide Posts, Personalities, Quotes, The English |

Byron was a leading figure in Romanticism. Regarded as one of the greatest European poets and is widely read and influential. His fame rests not only on his writings but also on his life, which featured extravagant living, numerous love affairs, debts and marital exploits. He was famously described as “mad, bad, and dangerous to know”.

All who want joy must share it. Happiness was born a Twin. Always laugh when you can. It is cheap medicine

A celebrity is one who is known to many persons he is glad he doesn’t know. A woman should never be seen eating or drinking, unless it be lobster, salad and Champagne — the only true feminine and becoming viands.

Death, so called, is a thing which makes men weep. and yet a third of life is passed in sleep. Why I came here, I know not. Where I shall go, it is useless to inquire.  In the midst of myriads of  living and dead worlds, stars, systems, infinity — why should I be anxious?

It is very certain that the desire of life prolongs it.

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Again … Goethe …

Posted on January 11, 2009. Filed under: Guide Posts, The Germans |

Goethe put it this way in Book V of his ‘Bildungsroman, Wilhelm Meisters Lehrjahre’:


People are so inclined to content themselves with the most commonplace that the spirit of the senses so easily grows dead.


It is only because the senses are not used to taste of what is excellent that many people take delight in silly and insipid things provided that they are new.



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Programme Yourself … and ‘how’…

Posted on January 9, 2009. Filed under: Personal Magnetism |

 Firstly, the First Idea of the Day is the Ruling Idea of that Day. This means that the first earnest vital thought of the morning will have a large share in controlling you all day long.


Secondly, the Last Idea of the Night Before Going Off to Sleep is the Saturating Thought of the Night. The last vital thought of the night, just as you are ready to drop asleep will saturate your being and ‘Make You Really What You Want’


Allow yourself to drop asleep between your better hopes and the solid determination to win.


At night, just before going to sleep, You must always be in the Controlling Seat and the Mind must be made to do as You wish and Command.


You must Control the Mind and not let it be controlled by circumstance – more so at this time.



‘You can set the pace of the Mind’s work for the next 24 hours by giving it the last suggestions before falling asleep and telling it what it has to do.



Program your self — Allot Time and Do Not Postpone’.

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Napoleon as Orator and Health at Waterloo …

Posted on January 3, 2009. Filed under: Personalities, The French Contribution |

Some one has written thus re the little Corsican. “One canot forget that Napoleon abandoned one army in Egypt, left the remnants of another in the snows of Russia and then strutted inot the dabacle of Waterloo”.  Well, here is what Houston Peterson, the noted authority on eloquence, says about this great leader of men.

“As a military orator, as a general addressing his troops, Napoleon was unsurpassed’. He invented a style of eloquence reminiscent of Caesar – brief, bold, declarative, familiar yet imperial in its bold sweep and cadence. It made an instant appeal to valor and the soldiers of the Republic died for him unquestioningly’. He spoke in a clipped, terse, passionate style, with an effect which  startled the world.

‘As a parliamentary speaker, confronted by a hostile or doubtful audience, he was a failure. His forte was not debate or eloquent persuasion but crisp proclamation, announcing his victories or his sovereign decisions. His genus rapidly put him in  a position where only the latter were needed”.

And now his Health at W;aterloo  –  Oroland  Barries

On February 26, 1815 Napoleon left Elba with one thousand of his devoted soldiers in seven small boats. They landed in Cannes three days later and began a march to Paris. However, Napoleon fell ill at Grasse, just after leaving Cannes. He had begun the march on horseback so he could be seen by everyone along the way, but his pain was so great he had to continue in a carriage. The bad roads and potholes made things worse. He rested for a while and then continued on horseback. Reports indicate that his “dysuria” had returned, undoubtedly a recurrence of the attack suffered at Borodino earlier. It has also been alleged that the attack was due to prolapsed hemorrhoids. The attack lasted two days, and then the march to Paris was resumed. Napoleon arrived in Paris on March 20th.

Napoleon was tired. After a few hours of work he needed rest, unlike his former vigor. He often sat silently and appeared sad. Between March and May his health grew much worse. He also had repeated attacks of dysuria. He recalled Dr Corvisart to his side, but the latter’s own health was failing too.

His condition was deteriorating rapidly as the showdown at Waterloo approached:

The night after the battle of Ligny on June 16-17, 1815, Napoleon fell seriously ill. He was at the castle of Fleurus near Charleroi. Napoleon was completely exhausted and was unable to rise from his bed for many hours. In the morning he was too weak to even issue important orders to Marshal Grouchy until well after 8am. Napoleon had become obese and was also suffering from another illness, much more immediately serious – prolapsed bleeding hemorrhoids. He had had hemorrhoids for many years, probably due to his chronic constipation and constant riding for long hours in the saddle.

On the night after Ligny however, Napoleon was suffering from seriously strangulated piles – prolapsed hemorrhoids pushed outside of his anal sphincter. He had spent most of the day during the battle of Ligny on horseback, which was certainly a credit to his endurance, but it must have been horrendous for him, certainly distracting. This “secret” was kept confidential until Adolph Thiers interviewed both Jerome and Marchand when authoring his Histoire du Consulat et de l’Empire. During the interview, Jerome was very unspecific, stating that Napoleon had a “little weakness of the blood vessels”. However, Jerome really spilled the beans just before his death in 1860 telling the whole truth about the incident.

A combination of stress, pain and his failing health probably was behind his defeat. His prodigious memory and ability to micromanage his forces weren’t there for him. For example, he left behind his best general, Louis-Nicolas Davout, back in Paris. He brought Michel Ney instead, whose cavalry failed to properly attack the British and take out their artillery.

A younger Napoleon, healthier and with a mind clear of pain wouldn’t have made  mistakes

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