Review of Archies

Just saw Archies on Netflix.

An OTT only movie directed by Zoya Akhtar, it is surprisingly watchable. 

The three leading characters , Archie, Veronica and Betty are played respectively by: 

Agastya  Nanda, grandson of Big B, 

Suhana Khan daughter of SRK, 

Khushi Kapoor, daughter of Sridevi 

Nepotism anyone? 

They all play 18 year olds in Riverdale, a fictional town in the hills of North India. Conveniently, they are all Anglo Indians, something that suits their upbringing and accents. 

For posh mamas and papas providing a launching pad to their laadlas and laadlis - the Archies brand, story and settings are ideal.

Like in the Archie comics, which people of my generation have read a lot of, the problems these kids face are not real world problems. They have their small little world and their small little problems, consisting of things like what to wear for the next party and why did Archie kiss that girl and not me.

The picture could as well have been titled Barbie World, for that is what the whole set ( the whole film is  shot on a set which is Riverdale village) looks like. 

Given that background, the kids fit right into their roles. It is unlikely they had to practice much to be the fun loving,  anglicised, detached from reality kind of teenagers that they are playing. A lot of current generation teenagers from SoBo and such areas will identify with them. 

The kids, being star kids, have obviously been through a lot of training in acting and dancing, especially dancing. They can really dance! The movie is made in the form of a Western musical, not very usual for an Indian movie.

The script is fairly trite, but when was the storyline ever important in an Archie comic? The director has done a good job of taking these kids through their paces, and keeping the screenplay fairly engaging throughout, with just that little bit of suspense about what will happen next. The sinister plot of Mr Lodge, conspiring with a local wannabe politician, to tear down the town's Central Park and to build a hotel there is thwarted by the kids, and they endear themselves to the whole town in that process. 

I don't know if these kids have it in them to make it big - very difficult to tell with this movie - but they all have done a fairly good job. Of the three, Suhana Khan is the most impressive. Khushi is kind of damp, and Agastya is good, like Abhishek, but also like Abhishek, seems to lack that extra something that say, a Big B has. 

In terms of acting, Mihir Ahuja who plays Jughead is good. Vedang Raina playing Reggie is eye candy material, I can imagine all the girls watching the movie swooning over him. 

On the whole the movie is a nice, light, entertainer. 

Worth a watch

See link below on side effects of vaccines, one of many such :

https://x.com/robinmonotti/status/1724195084051038576?t=KlPOD5Z4D184MpzcT_MDXQ&s=08

👆 this is just one of thousands of similar articles. Of a spate of side effects including sudden death caused by the vaccines. Even in India, which did not use mRNA. 

The conclusion is not that boosters are bad. 

The conclusion is not that mRNA vaccines are bad. 

The conclusion is not that we should believe these latest "medical" findings more than earlier ones. 

The conclusion is : 

All vaccines are bad.

The medical system is not to be trusted. 

Add to that, masking too. 

Not only are  vaccinations and masking not effective, they are extremely harmful. 

Where is the medical evidence for this you say? Even after all that has happened? The best way to spoil your health is by listening to the medical system.

And these conclusions are not based on hindsight, they are based on pure common sense, and proper understanding of health, both of which the medical system lack. 

Here is the link to my article in July 2020, even before the vaccines came on the scene.

I do not feel the need to change a single word even now

https://www.dineshgopalan.com/2020/07/corona-to-shelter-or-not-to-shelter_16.html

--
Dinesh Gopalan

mob: 9845257313; blog: http://www.dineshgopalan.com

On "experts" and their ilk

This link full of advice from HR experts is interesting: 

https://www.moneycontrol.com/news/business/hr-experts-warn-of-coffee-badging-as-employees-return-to-offices-11683761.html

It is interesting because it is a whole load of crap. 

Experts are of the opinion that...

Whenever I read that I switch off. Whatever subject the so called experts opine on, they will mess up. They will come up with a shit load of fancy sounding jargon, designed to show off their erudition and expertise; but the end result is that they invariably showcase their shallowness and vacuity.

The sole objective of "experts" is to confuse and confound, complicate and dissimulate, using a haze of words which leaves the reader in a daze. Which is precisely the effect that they are striving for. 

The net result of listening to experts in all areas of life is,

You spoil your health by listening to nutrition experts,

You never regain it by listening to doctors,

You complicate your work life by listening to HR,

You screw up your peace of mind by following what HR says,

You compromise on your fitness by listening to fitness experts,

Your relationships deteriorate further after following the counsellors' advice, 

You buy into toxic investments after listening to personal finance experts ... 

The list goes on. 

There is no substitute to common sense,

And there is no substitute to taking charge of your own life.

More and more it appears to me that if you want to lead a good life, you must stop listening to experts.

And why should you believe what I am saying?

Because I am not an expert, that's why. I proudly claim lack of expertise in every subject!

On modern hi tech mattresses

Oh, the needless complications of modern life... 

It's as basic an act as sleeping, which is as essential to us as eating or breathing.

They take that and convert it to esoteric mumbo jumbo. 

Modern lifestyles ensure that people find it increasingly difficult to sleep. Stressful jobs, addiction to screens, ignoring the biological clock, going against the circadian rhythm, faulty diets... The list of crimes that we commit against our own bodies is long. 

And then we don't get sleep. We obviously think that there is a magic pill that can solve the problem. We need better mattresses, is what we conclude.

Meanwhile, we are so unfit that we obviously have back problems. We conclude that our inability to bend and touch the floor is due to, you guessed it, a faulty mattress! 

Enter the mattress makers. They convince us that the answer lies in more and more "sophisticated" mattresses. And market them with such a seductive appeal that everyone gets more and more convinced that sophisticated mattresses are a necessity.

We don't realise it, but the moment we fall into that trap, we constrain our lives in several ways. Wherever we go, we need "good" mattresses to sleep on. That reduces the number of places we can go to, and it reduces the kind of things that we can do. 

So we constrain our lives further and further, with an ever constricting range of activities, coupled with  deep seated anxieties on that most basic of human functions, sleep. 

Meanwhile, the coolie at the railway station and the manual labourer at the construction site, work hard the entire day tiring tiring their  bodies out, eat a frugal meal in the evening, sleep on the bare ground, and get wonderful sleep. 

Oh, the ironies of life!

Sometimes, the solution to a problem lies in going in the exact opposite direction to which the world is going. Try this:

Buy a chataai, the old fashioned sleeping mat made of coir or grass or some such material. Spread it on the floor and go to sleep. 

I assure you you will never go back to sleeping on a mattress after that.

New Health Advisory

https://www.ndtv.com/india-news/10-die-of-heart-attack-while-playing-garba-in-gujarat-youngest-was-17-4505198#pfrom=home-ndtv_topscroll

It is garba time and this is what happened in Gujarat. 

-_-----------------+++------

Keep automated external defibrillators on the standby before organising this event! 

Be careful before you do any exercise that you are not accustomed to!

This event was held across the state at many places. It resulted in 500 ambulance calls and ten deaths, all of young people.

Be very careful before doing this, said the father of one of the youth who died, with folded hands, and tears in his eyes! 

No, this is not the Tour de France or the Triathlon. 

It is garba! 

A kind of dance form where people gently move around in circles clapping hands ( or small sticks).

Now they will organise a conference of "experts" to find the probable cause.

The news report after the conference will state: 

Everyone at the conference  arrived in cars. They were taken in electric buggies for the last three hundred yards, since cars can't reach and walking is out of the question. 

They were fed  processed foods, made in sterile conditions, with all the bad natural vitamins removed by processing, and by adding good synthetic vitamins. As per the recommended FDA guidelines, that is their diet. 

They all had  to show "current status" for vaccinations, which is possible only if they have had booster shots of the following vaccines in the last six months: 

Covid 19

Covid 20,21,22

SARS 

Avian Flu

Floral flu, Zoonosis flu

R2D2 flu

C3PO flu 

And they were all mandated to wear masks, since people in such close proximity are a danger to each other  and a huge risk. This is again as per the latest FDA guidelines. 

The organisers made a huge mistake.

The participants had to walk 300 meters to a tent at the far side of the lawn where dinner was being served. 

And for dinner, they were served fresh vegetables , fruits, and juices. This is shocking, no one knows how this was allowed, but yes, it is true! 

And there were   mosquitoes from the nearby lake; again very shocking, but true! 

And they were all asked to remove their masks outside the tent. This is very shocking, but it happened! 

Immediately after the lunch , delegates started dropping dead. 100 of the 500 delegates died, and another 200 were rushed to hospital.

Experts are still speculated about the causes, but they are all agreed that the following factors played a large role in causing the deaths: 

1. Walking 300 meters to the dinner venue 

2. Removing the mask and being exposed to so many people in close proximity at once. 

3. Eating fresh fruits and vegetables. 

The government has ordered an inquiry. Meanwhile a country wide lockdown has been imposed. The only activity that people are permitted to do is coming to their balconies at 6 pm every evening and banging on plates and spoons, to laud the brave warriors who are forced to step out of their houses every day, for their ultimate bravery in stepping out of home, which is very dangerous.

The covid vaccines were dangerous, they now admit

Trace everything to the source, both when it comes to food and when it comes to medicine.

What are the ingredients ? 

How are they combined ?

How are the processed?

We human beings will readily accept a cocktail of bloody poisons, and suspicious ingredients, directly injected into the bloodstream. 

And when someone points out that vaccines are bad for health because: 

A) they contain deadly chemicals 

B) they bypass the body's natural immune defences and are injected directly into the bloodstream 

C) therefore they are unsafe, except if the benefits exceed the costs, which is almost never 

People don't pause and use their common sense and rush to stand in a queue to take the vaccines, like it is Amrut, the elixir of immortality,  being distributed by Mohini,

Simply because they have been seduced by Mohini , and induced into a state of unreasoning panic,

To avoid a mere flu, an innocuous flu,

And they look at the chaos who are saying that it is bad for health , and call them anti-vaxers , anti-science, anti-public health,

And rush to pass laws that violate every person's fundamental right to their own body and force people to take them, 

And then line up for booster shots every six months,

And, even after enough and now evidence is shown, 

Refuse to accept the truth , because they just cannot admit that they have all been suckered for so long and so blatantly,

It only shows,

That people are, 

Well ... I leave it to you too supply the right adjective. They are all likely to be synonyms of mentally challenged

Review of Khufiya

Just saw Khufiya, a Vishal Bharadwaj movie, on Netflix.

A tight spy thriller starring Tabu and Wamiqa Gabbi. Tabu is of course an excellent actress, but Wamiqa was a revelation. She is probably better. 

These two women are the main protagonists. Atul Kulkarni, a prodigious actor, is wasted in a role that does not have much scope. 

Vishal Bharadwaj's direction, as always, is extremely good. He manages to keep you engrossed for the entire duration, without lapsing  into inanity. The movie has all the ingredients: love, sex, dhoka and violence, while at the same time being completely and cold bloodedly unsentimental, like any good spy movie should be. No dearth of emotions, but no wasted emotions or melodrama either. 

The music is  also excellent, and blends well with the overall movie. 

Worth a watch

Why not to trust the medical system

"There are two words that a psychiatrist fears" Prove it. This is Shane Ellison. He has a masters in organic chemistry and has worked for pharmaceutical companies like Array BioPharma and the infamous Eli Lilly. He perfectly summarizes the cold hard realities of the drug industry and what the true intent behind their research is. It has nothing to do with resolving the underlying problem, and only has to do with treating symptoms to can keep you as a customer for life. So what happens they run out of symptoms to treat? Invent more diseases and diagnoses with associated symptoms so they can continue to develop more drugs to "treat" them. This is what the DSM-5 is. When they find those drugs to be deadly or harmful in their internal research, instead of stopping the release of the drug to protect public health, they bring in their marketing department to come up with a manipulative and dishonest sales agenda to sell the drug to people, and then they talk to their lawyers and actuaries to discern how much profit they need to make to offset the potential legal costs and ramifications of their drug harming or killing people. All of this is fueled by money and bribery. Politicians are just the same as doctors, scientists, researchers, journalists, or any other profession people look towards as an authority for guidance or trust. If you pay them enough money, they'll say and do whatever you want. This is the system that allows for your 4 year old to end up on xanax, adderall, and prozac because some authority said there was something wrong with them, which they made up in the first place to justify the drug.

That is a tweet by Shane Ellison.

My views:

This is a good illustration of why you should never trust "authority figures" or the "system". 

If you want to be healthy, you need to make your own decisions. Which is scary. 

If you want to be  healthy, you need to educate yourself enough to be able to make your own decisions. Which is daunting. 

If you want to be healthy, go need to go back to ancient wisdom, to Yoga, Ayurveda, Naturopathy, the science of  Trophology... this is not taught to you, it will not be, since the education system is, after all, someone's decision about what you should be taught, and that someone does not necessarily care for our welfare. 

Which is a pity, since we really start believing that "modern medicine",  which is a byproduct of venality and ruthless exploitatation, is really more "scientific" than the accumulated wisdom of milleniums of human existence, passed down by sages and through  cultural practices.

We need to take control of our lives. 

Or else, someone else will.

Hospital California

There is this article in today's paper that NEET qualifying criteria for post grad medical seats are being reduced to zero percent, since many post grad seats are going abegging with no takers. 

This is how the system works. Politicians create medical seats to make money. They lower the qualifying criteria for admissions to fill the seats.

More and more doctors are created. Poor quality ones as we saw above, but the quality of the doctors does not matter, in any case even the best minds will be reduced to moronity once they enter the system.

Meanwhile more and more hospitals are being built. And Pharma companies are pressured by the shareholders for profits. 

Now the doctors need to be employed, and the hospital beds need to be occupied, and the Pharma companies need life long customers.

Enter the food industry. They ensure that people eat what makes them sick and keeps them sick. 

But how do you get people to the hospitals?  For that , you open diagnostic centres, increase the number of tests to a few hundred, and keep lowering the criteria on each of them, so that, if you go for a medical check up, you are guaranteed to be told you are sick. 

Once you enter the hospital, the whole thing takes care of itself. The drugs they feed you will ensure that you never get better. The medical system is one place where you can only check in, you can never check out!

Hospital California, here I come!

Review of Jawan

Some movies are very confusing. Went with my niece yesterday to see Jawan. It was, to say the least, an interesting experience.

Story starts with an almost dead SRK being rescued by mountain villagers, after drowning, with a few dozen bullets embedded in him. Village attacked by Chinese looking soldier characters. Hero who is still swathed in bandages, rises from his bed, wrapped  like an Egyptian mummy, and kills all of them.

Lovely. I like plots with alpha heroes, vile villains, where the  hero bashes the villains.

And then the confusion starts. 

I think the film wanted to make a political message. It's an SRK home production ( producer is his wife, who I am sure has no role to play in the movie. As in other parts of his life, the wife's role I am sure was played by someone else). 

It looks like they put a bunch of scriptwriters in a room, and said, list the problems that I.N.D.I.A needs to highlight. Farmer suicide. Ok. One sentimental farmer suicide back story and victim. Corruption in high places, callous disregard for people, siphoning off of health ministry funds. Ok. One sentimental medical scam back story and victim. Defence procurement scams, arch villain arms dealer. Check. One more back story with a victim who is hanged. Arms dealer is Vijay Setupati speaking Tamil. What do you mean,  it was a Hindi movie! Ya, but I still think he was speaking Tamil. I thought only mallus had an accent but to know what Tamil Hindi looks like, you have to hear Vijay Setupati. 

One more team of scriptwriters sitting in another room is in charge of the script for main hero and heroine. They have a brilliant idea. Have two two heroines. Nayantara, and Deepika. Have two heroes. Oops. Not possible. SRK movies have only one hero, SRK!  Every Indian, all one billion of them knows the answer to this one. Yes, you guessed it right. SRK plays a double role. 

Meanwhile, a third team of scriptwriters in another room comes up with the theme of soldier. Soldiers are in. Very patriotic and all that, and the movie has a political theme, so put that in. One of the SRK's is soldier! 

What about Adani scam? 40000 crores that Rahul Gandhi keeps harping about? Put that into the plot too. And the Thoothukudi copper plant closure? Polluting industries? Rapacious politicians hand in glove with industrialists? Put all that in too! 

Robin Hood! I like Robin Hood! Says SRK's son who walks into the script writers' meeting. Let's make SRK a Robin Hood! Which SRK? Both! Ok. Done. Check. 

One of the script writers is just back from California. He is still in an intellectually inebriated state after being exposed to the insanity capital of the world. We have to include women's empowerment, and senior citizens he says! 

Lovely idea! Let's include them! The heroine Nayantara will be a kick ass commando  kind,  and, junior  SRK's army will consist of six commando women. And senior SRK will lead a commando team of four senior citizens.  

Not enough women, said the returned California NRI. Ok! Let's make it a women's jail with 6000 women. And make junior SRK the Jailer. 

At this stage in the script, all the script writers in the room stood up and clapped. 

Then in another room, another team of scriptwriters put all the scripts into a cauldron and stirred it up thoroughly. 

A proper heady witch's brew emerged.  Which was then slickly packaged for serving to the audience.

You have to be real junkie to withstand this kind of brew. My niece and I are kind of deficient on the junkie scale. We were served slick, fast moving snippets of commando style fighting, political messaging, arch villain, old SRK, young SRK, 6000 women, sentiment, soldier, patriotism, jingoistic vigilantism, altruistic Robin Hood do goodism,  sanctimonious homilies, and Sanjay Dutt. They even resurrected Sanjay Dutt from the crypt of forgotten heroes and gave him a macho role. And SRK. Two SRK's. Our heads were reeling. At one stage we even contemplated walking out. But these confounded witches' brews have a strange effect on you, they hold you on your seat nevertheless. The mind wants to go away but the body refuses to move. 

And so we watched till the end. Niece went home, and I headed straight to a reunion with my college alumni gang. I quaffed on the draft beer, I really needed it! A heady end to a heady day! 

Review of Jailer

Saw Jailer yesterday. It came with a lot of advance hype since the film has been touted  up as one of Rajni's best that lives up to the Rajni brand, even by those who have seen it. 

Till the interval, it was fine. Rajni is introduced in neon letters ( whistles, garlands, aartis everyone) and all he does is stand around, wear his goggles, and walk. That is enough, one can imagine, to send his fans into a frenzy. 

The plot gets increasingly taut and action filled till the interval. With Thalaiva not doing much Thalaiva does a lot! 

And then the decline happens. As if the script writer, director and entire crew were replaced by a bunch of people  from Ekta Kapoor's saas bahu serials. Actually no, I take that back, Ekta Kapoor serials are better. 

The plot gets bizarre, with no logic or coherence. The actors are all hamming, in fact each one competes with the next to see who hams best. The comedy filled action sequences, or action filled comedy sequences, whichever you prefer, are of the slapstick kind that audiences outgrew in the eighties. 

Mohanlal and Shivrajkumar, two superstars of the South, deliver ham filled performances in roles that any bit actor worth his dignity would have refused. But they deliver what the director wants, since they are indistinguishable from the rest of the cast. 

Being a masochist, I watched right till the end. I really have a tendency to stick a knife into myself and twist so that it hurts. 

Thalaiva should have retired long back. And Mohanlal and Shivrajkumar will never live down this infamy. 

I think I will go and watch a kindergarten play before this week is out. I desperately need something better! 

Karan Johar Ki Prem Kahani

Saw Karan Johar's movie Rocky Aur Rani Ki Prem Kahani.

A wonderful light  movie with cutting humour. A buffed up Ranveer with a six pack and Alia who is her own cute self are of course good. 

Dharmendra, Shabana Azmi and Jaya Bhaduri play their age. The love story between Dharmendra and Shabana is a nice side plot. 

The story is of course boy meets girl, families oppose, etc. etc. like every third Hindi movie. 

But the script is still the best part  of the movie, at least  before the interval. Full of  cutting takes on tradition, modernity, feminism, toxic masculinity, gender roles... with a typical Karan Johar irreverence. 

After the interval it turns into some typical Bollywood melodrama but thankfully never too heavy. 

What a relief to watch a nice non intellectual fluffy Bollywood movie, especially within a week of watching Oppenheimer which is a total intellectually pretentious dimaag ka dahi. 

Highly recommended for those who go to the movies just to have a good time.

Disclaimer: Karan Johar behind the camera is ok, but I can't stand him in front of it. Watching him in Koffee with Karan  almost makes me puke

The Power of Now - Part 1

Just picked up Eckhart Tolle's acclaimed book 'The Power of Now' to read.

Am about one-third of the day through the book - it seems very similar to yoga philosophy. Nothing really new, but like all universal truths, these are thoughts that can bear any amount of repetition, and any amount of retelling. 

Am paraphrasing ( this is not a book summary in the strict sense, it is more a condensation of the thoughts expressed in the book ) the thoughts in the book, as I am reading - a stream of thought kind of book review in a sense.

Here is Part 1: 

----------+++++++----------

The mind is in constant chatter.

Chatter creates turmoil.

There is a higher You which can detach itself from this you which is the sum of your thoughts,

This higher you , can it watch the other you,

And tell it to stop chattering

Watch your thoughts,

Watch your feelings,

Watch your emotions,.

From whence this fear, this deep seated dread?

From whence this need to be right? 

Whence the anger? 

Whence this anxiety and dread? 

All this is Pain. Why are you living in constant pain?

All desire arises from the ego which has a deep seated lack, a feeling of being incomplete. To make the ego whole, you chase desires. Desires of money, fame, possessions, relationships. The ego needs constant external validation. The ego's needs are endless. It feels vulnerable and threatened and so lives in a constant state of fear and want.

The root of unconsciousness is identification with the mind.

Cease that identification. Become conscious.  Realise that you are not the mind. 

The mind entangles you due to thoughts that arise from fear, and thoughts are of the past or the future. 

Do not be trapped in time, the past is memory and the future is anticipation. 

Get out of that trap. Be in the present moment, acknowledge it, allow it to be. 

Be in the Now. Just Be. Now is the most precious thing there is, don't squander it by being elsewhere in time. 

Now is the intensely alive state that is free of time, free of memory, free of anticipation, free of pain, free of thought. 

At this moment, nothing is lacking. 

Use "clock time", learn from your past and plan for your future, but don't dwell on the past or hanker for something - avoid "thought time". 

The future is always the same as the past. You are your ingrained thoughts, patterns, and beliefs. To get out of that mould, to break that pattern, you need to break the shackles imposed by the mind. Your accumulated negativity stops you from breaking those shackles. 

All problems are illusions of the mind, they are only "situations" that you are dwelling on. 

Be in the present, and discover a space of joy , ease and lightness.

( To be continued)

Dinesh Gopalan,

3 August, 2023

Oppenheimer

Just back from seeing Oppenheimer. I don't know what I was expecting, but given all the hype around it, I was surprised.

The movie could have been shot in a drawing room, which it probably was. There's a lot of who-dun-it kind of suspense and intrigue, except that I could not figure out what was done. At random points in the movie, when two characters are talking, the music builds up to an insane crescendo, for what is, forget climax, not even a damp squib. 

The hero ultimately seems to have triumphed, but I don't know in what. 

The team that created the Bomb at Los Alamos is legendary. I think it is that awe that the Director is counting upon, for the audience to think that some epic things are happening. 

For about half an hour, just before the interval, I even slept off. 

The problem of course could be that I am not the intellectual kind. I need simple plots, some straight fights, a little bit of romance, and I am happy. I am not saying I like only Govinda movies, but Christopher Nolan may be too intellectual for me.

Wife and son were also there and they liked the movie, and as the  designated driver, I had to stay till the end. 

Perfect waste of a Monday  afternoon. Now don't ask me what I was doing watching a movie on Monday afternoon. A very good friend gifted us three IMAX gold class tickets, since he realised he had booked it at the wrong theatre. And on most Monday afternoons I am essentially doing nothing anyway.

Ruminations on a Tuesday morning

Your innermost beliefs are at variance with your speech and behaviour,  which is dictated by survival considerations. 

As a result, you suffer from severe internal conflict which warps your personality.

Society does not care if you are warped or not, so long as you talk the talk and walk the walk.

The inviolable spiritual law says that you will be at peace only if your thoughts, speech and actions are all aligned. 

Therefore, those who need to progress on the spiritual path need to distance themselves from society, family, and all such structures that being them into proximity with other people.

When you are young, a balance that is tilted more towards society and less towards spirituality seems more  rewarding and is probably essential. 

As you grow older, the balance has to shift. You need to tilt more and more towards spirituality. That is the logic behind the four "ashramas" in Indian philosophy, Brahmacharya / student life, Grihasta / fulfilment of worldly desires, Vanaprastha / giving back to society while being still in it, and Sanyasashrama / giving up everything and focusing on Moksha,  rather than Kama and Artha. Underlying the whole thing is Dharma, which one must not forsake throughout one's life.

But the template of "modern life", with its emphasis on "achievement", "wealth", and "success" keeps us trapped in the grihasta stage like a person on a hedonistic treadmill who is unable to step off. 

So, where lies the answer? How does one strike the right balance? That is an eternal question that needs to be constantly reinterpreted in line with shifting ages and times...

Oh, the chemicals we eat!

Ah there! One more article on food additives. This one  outlines how aspartame, an artificial sweetener, widely used in all the foods we eat, is a deadly poison. 

Isn't it depressing, reading all this? 

Actually no. Who said aspartame is poisonous? It is FDA approved!, you think. 

We insist on consuming chemicals. In what way is aspartame, a toxic mix of chemicals, food? 

But it is FDA approved, right? All that FDA approval means is that the stuff will kill you slowly.

This is just one food "additive". Our processed and packaged foods contain thousands of additives. In varied combinations. 

"Processed and packaged food" includes table salt, white sugar, and refined oils. And ready to eat foods. Maggi. Biscuits. Ready to eat ( add only hot water) kind of meals. 

No corporation cares for us. No government does either.  No regulator gives a damn. To all of them, we are "consumers", lab rats meant to consume their poisons in order to fatten their wallets. 

The food industry makes us sick, in body and mind, chronically, perpetually sick. And the Pharma industry stands ready to feed us more poisons that will make us sicker. 

The doctors, dieticians, nutritionists ( always add a prefix "so called" when you talk about them) further compound the problem. They are a product of the same system, and whatever they learn is guaranteed to further the interests of the chemical, food, and Pharma companies.  The system ensures that. 

All this is scientifically approved, you say. What science? The reductionist Western science is of no use when it comes to food and health. It is that same science that says that salt is sodium chloride, just a mixture of two elements forming a molecule. But it is, you say! What else is it if it is not sodium chloride! Ok, do one thing, have one box of sodium and one canister of chlorine in your kitchen. Just add both to all your food. You will be fine, trust me, it is scientific. 

But there's a ton of information out there. It's very confusing. What should I do, you ask. 

Well, for starters ignore what the system tells you. Listen to your common sense, and your grandmother. Unless your grandmother happens to be "educated" of course, in which case , don't listen to her.

And follow a few golden rules. Like this one: 

Today's golden rule: 

*Buy only things that grow. (Biscuits don't grow, and neither does Maggi). And cook them yourself, in your own kitchen.*

Did I hear you screaming at that nightmarish suggestion? And, to de-stress, reaching for the phone to order pizza and diet Coke? Since you are off sugar, sugar is unhealthy you see, and only have zero calorie diet coke which has aspartame, that has been approved by FDA as totally safe. 

You eat that pizza, drink that coke, belch, and you are happy... 

God bless you. May you live a long and healthy life!

A MAN CALLED OTTO

REVIEW OF MOVIE 

A MAN CALLED OTTO 

How to make a woke movie

I had read about how moviemakers are writing movies with woke themes in mind. Didn't realise the full extent of that till I saw this movie "A man called Otto".

The movie hit me hard with its cringeworthy wokeness. 

On the surface, it is a feelgood innocuous movie.

But this is how the scriptwriters went about it.

Want:

Wheelchair 

Crimes against the less able 

Sentiment

Check 

White man with one neighbour black family

Check

Bitter white man gets redemption due to immigrant  Mexican family,

Sentiment,

check

Woman is the savior,

Smarter than men,

Sentiment,

Check

Transgender 

Check

Transgender thrown out of his ( her, who knows) by dad, 

Golden hearted human being ,

Sentiment,

Check

Social media teenager fighting for rights,

Check

Evil all white builder / developers as villains,

Check

Weave everything together into feel good family drama,

Sentiment,

Check 

Watch the movie at your own peril. You may feel disgusted at the cruel, male, straight, able,  white dominated world,

Or you may feel disgusted at the woke kitsch being served up

One of the two is bound to happen

👆 there is always something more than meets the eye.

Seldom is fulsome praise showered,

On even the most deserving,

From a place unselfish and true - 

Most people who praise are self serving!

It is rare to find an altruist,

Even among men of saintly garb;

The grist that goes into the mill,

Enriches the Miller and the Mill! 

Beware of all encomiums,

Even the seemingly unselfish;

Especially those who are in power,

Are used to it and deal with it well!

Flattery is to the sycophant,

Just a tool in his arsenal;

Censure and praise are one to the savant,

Who takes both in his stride!

WOKERY FAKERY

It takes ten times the energy,

To counter something that's fake;

Those who invent fake narratives,

Merit ten times the punishment!

When fakeness is covered with wokedom,

Narratives don sinister forms;

Fake is the entire woke movement,

Perpetrated by so called victims!

It is time we called out their bluff,

Removed the woke monsters from their place;

It is time to shut down the asylum,

And reclaim sanity for the world!

Hi, I am Hanuman

AI is disrupting everything. Most jobs will be rendered obsolete. 

How to then survive in the new normal?

Chill, do nothing, get universal basic income from the government. Food will be available, transportation costs will be close to zero, and  data and communication costs will be close to zero.  But "amotivational syndrome" will increase. Everyone will be a bundle of insecurities complexes, phobias, manias, with fluid identities and no anchors . 

So, you will  immerse yourself in virtual reality games on the web. I plan to be Hanuman in that  massively multiplayer online world. 

Or, you can  take up jobs that AI cannot disrupt. 

 Cook. Barber. Senior Citizen companion. Dog walker.  Sounds very exciting no? 

Sports trainer is no good, Hanuman is not interested in playing badminton. 

Sex worker is an option but the person immersed in the online world will have only enough libido to spare for his avatar, in real life they won't be interested in sex. In any case, they will have lifelike sex toys with a million possible simulations. And given that they don't know what their identity is, they will be very confused about what kind of sex they want. And whatever they do, they will feel guilty about, they will be nervous wrecks. So they will just get back to being Superman or Wonder Woman in the online world. 

You can fall into one of those categories. 

Or, you can figure out how to add value. Do something that the AI cannot do. 

Any formal degree that you pursue may be obsolete by the time you finish the course. 

All universities will be shut. Learning will be free. You can learn advanced nuclear physics sitting at home even today at close to zero cost.  

But you will not have the motivation to learn. You cannot even bear to face the real world. 

So you get back to being Batman in your online Avatar. But  a Batman with a difference. A biologically male Batman, who gender identifies as a trans fluid binary androgyne, with the pronouns Theybe and Theynuts. Your avatar will be fighting real battles in that world, like filing a sexual harrasment case against Wonder Woman who is actually a half male quarter female searching for the right identity to fill the missing quarter in theythem's sexual identity. 

The real world outside with all its stresses like having to talk to people, real people, will be too horrible to contemplate. 

But wait, I am falling into the same trap that this generation is prone to, what do you mean "real world". I am Hanuman and my real world lies elsewhere. 

Let me get back into my world. Bye!

A short parenting guide

Teach your children to follow the rules where it is appropriate to do so. 

Give your children the courage to ignore the rules, and fight for their individual rights and liberties, when it is necessary to do so.

Do not be over protective of your children. They grow and prosper under your shade, but unless they are exposed to the sun, they will wither and shrink. 

Teach them the values of diversity and inclusivenes, of gender parity and fairness. But guard against the modern woke definitions of what these terms mean. Learn to recognise and point out to them where the world is going mad.

Teach them, if you can, the ability to focus on one thing for an extended period of time. 

Teach them that they can only expect  the world to do something for them, if they do something for the world. They are not entitled to preferential treatment merely because they exist.

Tell them that the path to happiness is finding that special skill or talent that they possess which will enable them to be of service to others, and to use that talent fruitfully. 

Teach them that money is only a by product, and can never be a goal. 

You wonder if  you have managed to learn these lessons yourself  in the first place? 

Doesn't matter, try teaching  them anyway. So that they don't repeat the same mistakes that we did !

RAMA NAVAMI

The epics were set to story,

From the lives and deeds of real men;

The Avatar is allegory,

And inspiration for the real!

Maryada Purushottam,

Ideal man who walked the earth;

In the act of worshipping him,

We imbibe some of his qualities!

We need lodestars to guide us,

On what's right and what's moral;

Gods are personification,

Of all that's high and good in us!

The Lord didn't have an easy time,

When He chose to walk this earth;

His troubles were like the rest of us,

So were his joys and sufferings!

His life serves as lesson for us,

His deeds act as inspiration;

In each one of us there is Ram,

Waiting to emerge with his blessings!

Stand up call-edy

Friend of mine just told me she has to attend a stand up call. She is of course a techie. 

I am confused. What has standing up got to do with a call? Is she not allowed to sit during the call, which she said is not face to face. Wait! If not face to face, it will be bum to bum or what? I mean all meetings are face to face, especially online meetings, or am I mistaken? 

No no it's a scum meeting , she said. Oh, you mean your colleagues admit they are scum, I asked? 

No you dodo , that is scrum meeting , we are all agile, she said. Hello, just yesterday you were complaining of backache, how come you are claiming to be agile?, I said. What do you know, she said, every week  we plan for the next sprint. Now I knew something was wrong, she is hardly the running type, she is more the samosa jalebi rest on her chair type. She was obviously pulling my leg. 

Anyway, back to the stand up call. A few questions come to mind: 

Substituting someone in a stand up call: is it called standing in

Not allowed to attend stand up call as punishment: is that what is standing out

Funny stand up call: that I think is what they call  stand up call-edy

Sex worker soliciting customers at Street corner: should then ideally be a stand up call girl

Cancelled stand up call: is it called a  stand down call

These techies I tell you, what what new terms they invent...

Change in Debt Fund Tax Rules: what should you do?

Following up on my previous article of 25^th March (link: https://www.dineshgopalan.com/2023/03/change-in-tax-rules-on-debt-investments.html )

 

The changes will be effective from 1 April, 2023, for all investments made on or after 1 April. What this means is that if you invested anytime on or before 31^st March, 2023, the old rules will apply even if you sell after 1/4/23.

 

Why has the government done this? Debt funds enjoyed an unfair advantage over bank deposits because of their tax treatment. This differential treatment has now been removed. This move was always on the cards – it was not a question of if, it was only a question of when.

 

There are three levels to any investment:

 

 

1.     Protect principal, in other words, the risk element. Investments in government securities are better than investments in AAA corporates are better than investments in other companies and NBFC's are better than investments in risky companies, etc.

 

2.     Protect against inflation. Inflation eats your money away. The "real" return of your investment is the return you get over and above inflation. You hope for at least a zero ( and not negative) real rate of return.

 

3.     Get a real return. The return you get is proportional to the risk you are willing to take, at least in theory. Philosophically, this makes sense, and practically, this is where the whole subject becomes murky and subjective. How do you assess the risk? How do you decide whether the additional returns are commensurate with the additional risk? Anyway, everyone wants to have their cake and eat it too, but in most cases people struggle for their bread!

 

Debt is supposed to protect your principal and protect against inflation. It will never really give you a real return. The real return from debt will always range between plus or minus 2 percent. If it is anywhere above plus 2 percent, you need to be wary – there is likely to be additional risk involved.

 

The options for debt investments are, practically speaking:

 

1.     Bank deposits and 2. Debt mutual funds.

 

We are ignoring PF and PPF in this discussion, since it is not a like to like comparison. Investing directly in corporate or NBFC deposits does give a slightly higher return than the above two options, but at a significantly higher risk, so that route is not worth it.

 

Even when it comes to debt mutual funds, choose only low risk funds which invest in the best quality paper – the extra percent or so that you get from funds that invest in riskier paper is not worth it.

 

All right, now that the tax arbitrage has been removed, what should one do?

 

The entire discussion assumes that the returns from debt MF's and Bank FD's are broadly the same which is broadly true (if you wonder why I am hedging in that statement, well, that is in the interest of being broadly correct!).

 

Advantages of Bank FD's: They are easier to understand.

 

Disadvantages of Bank FD's: You need to decide which bank and what tenor (duration of investment). The decision on tenor is not an easy one. Every time the FD matures, you have to remember to roll it over. Tax  on FD is payable every year, even if it a "cumulative" FD not paying out periodic interest, thus reducing the effect of compounding. If you cancel an FD prematurely, you pay a penalty.  If the Bank collapses, the Deposit Insurance covers you for only five lakhs; this risk can be mitigated by investing in highly safe banks which the government will ensure will not collapse, and by spreading your FD's across banks.

 

Advantages of Debt Mutual Funds: They are automatically diversified, since the investments are in a basket of companies and securities, and you can never lose all your money at once. Once you put the money in, you don't have to track maturity, reinvestment, etc. There is no TDS deduction as in banks, which, in my view, does not matter so much, but it does seem to matter to most people. The "capital gains" on sale can be set off against other capital gains and losses.  You pay tax only on sale, and not annually.

 

So, the answer is clear. Debt funds are the way to go! 

 

Well, but that is only the first step. A few additional pointers, that you need to keep in mind:

 

1.     Do not invest in Funds that invest in riskier paper. The additional one or two percent is not worth it.

2.     There is something called interest rate risk which even the safest of debt funds carry. ( see : https://www.dineshgopalan.com/2023/03/revisiting-investments-and-investing.html ). To avoid interest rate risk, it is better to invest in funds that invest in shorter duration paper, like liquid funds, ultra short, short duration funds, and money market funds. However the interest rate cycle is at or near the peak and this is not a concern for the immediate future. In case it looks like there will be an increase in rates at any point in time, one needs to pull out the investments from Funds that invest in longer duration paper and put them in the above mentioned Funds that invest in shorter duration paper.

 

Huh! I can see you staring at the above paragraph incredulously, thinking – yeh kya tamasha hai, no one tells me all this, and even if they do, I don't understand anything! Kucch samajh me nahin aa raha!

 

Well, I am sorry, but anything can be made only so simple as to make it understandable, but not so dumbed down that the content is lost. The subject is inherently complex, and I do not know of a simpler way to explain it.

 

 

The sum and gist? The advice? You may continue to invest in debt funds, in preference to Bank FD's.  But that still does not absolve you from learning about them and keeping an eye on the market. But then that is true of life in general – nothing absolves you from knowing enough to safeguard your own interests.

 

Non-Finance people can stop reading at this point.

 

For Finance folk: d

 

These changes in rules are for funds that have less than 35 percent equity component. For funds with greater than 65 percent equity, equity rules apply for taxation purposes (15 percent for STCG and 10 percent for LTCG, no indexation).

 

For the funds holding between 35 and 65 percent equity, the rule continues to be: add to income and pay at slab in case of STCG ( less than three years); if greater than three years, that is, for LTCG, twenty percent tax rate with indexation of purchase price is still applicable!

 

Isn't that yummy? Even as a person with a reasonably good understanding of Finance, I find that my head it spinning. It is too early in the day, otherwise I would have poured myself a stiff peg of whiskey.

 

Sigh…

Change in tax rules on debt investments

Starting April 1, 2023, investments in debt funds will no longer be eligible for indexation benefit on Long Term Capital Gains. 

A small tweak, in small print, in the budget. The government proposes, and the government disposes! But the implications for the investors are quite big.

But it is not easy to understand what this means. Understanding that one sentence above presupposes a knowledge of tax laws and of investment options in financial markets.

So, a small primer on the required essentials first. 

1. You have broadly four kinds of investment options ( there are more but these are the primary ones). Equity, debt, real estate, and gold. They are called asset classes. Each of these carries a different risk-return profile.

2. For each of the above asset classes, you can choose to invest either directly or through mutual funds. 

3. Debt mutual funds are mutual funds that invest in debt paper of various kinds, like debentures of companies, bonds, treasury bills, government securities,  deposits, certificates of deposits, money market instruments... The names are many, and confusing, but essentially debt MF's invest in debt paper of the government or of  various companies or financial institutions. They earn interest on their investments and get their principal back on maturity ( hopefully). All these investments are of the form where they can be bought and sold in the secondary market to other investors, meaning they don't have to wait for the redemption date to get money, someone else is always available to buy the debt paper from you.

4. All investors pay income tax on their income. The tax is based on a slab rate from zero to thirty percent. Income consists of whatever you earn, including interest on your debt investments and dividends on your equity investments, and of course your salary, pension, etc. 

5. What about when you invest in equity shares or land? When you sell them you make a profit ( or loss) . Let's say you buy equity shares of Infosys for one lakh rupees and hold them for seven years. Or buy a piece of land and hold it for 7 years. You get dividends on the  shares every year and nothing on the land of course. The annual dividends  are part of your annual income, and they are just added to your income on which you pay tax.  Let's say you sell the shares, or the land,  after seven years for six lakh rupees.  You have made a "capital gain" of five lakhs. How is this taxed? 

If it is "short term" capital gain, meaning you held the investment for less than one year in case of equity and two years in case of land, the sale price minus purchase price, in other words, the gain of five lakhs is just added to your income for the year, on which income you pay tax.

If it is long term capital gain, you pay tax as follows: 

a) Your purchase price of one lakh is "indexed" upwards based on the  inflation in those seven years that you held the investment, based on an "income tax indexation table". Thus your one lakh becomes, say, one lakh eighty thousand.

b) your capital gain on sale is sale price less indexed purchase price, which is six lakhs minus one lakh eighty thousand, which is four lakh twenty thousand. You pay tax at the flat rate of twenty percent of that, and your tax works out to 84000.

6. All investments in mutual fund units are considered "capital " investments, like the investments in Infosys shares or land above. On sale, they are taxed as per the procedure explained in Point 5.

7. To determine whether the gains are long term or short term, in case of equity mutual funds, the cutoff is one year. In case of debt mutual funds, the cutoff is three years. 

Ok, now let's talk about the amendment to the tax law that is effective from April 1, 2023. Go back and read the first sentence of this article. The special tax treatment for long term capital gains on investments in debt mutual funds will no longer be applicable. In other words, when you sell units of your debt fund, your gain, that is sale price minus purchase price, will just be added to your income for the year, and taxed accordingly. 

Still confused? Don't blame yourself, blame the tax laws, they are designed to befuddle us and create a state of brain freeze. Just go back and read the whole thing again. 

Ok, you went back and read the whole thing again. Or you called your  friend the CA and regretted it, for now you are even more confused. I know very few CA's who can explain things to the layman, forget that, they can't even explain things to each other! 

In any case, you read it again , and now you think you understand what I am talking about. 

The next obvious question is, what is the implication for you? 

We will save that for the next article, coming up soon. 

Now, go and have that coffee, or that stiff peg of whiskey, you need it. Reading about tax is always taxing.

Revisiting Investments and Investing

There is no such thing as a risk-free investment.

Holding cash at home is not risk-free since inflation eats the money away.

Investing in a bank involves varying levels of risk:

- the most safe banks are the scheduled public banks. You expect the government to cover losses if the bank fails. Officially , the deposit insurance cover is only 5 lakhs, but in general the expectation is that the government won't allow the bank to go bust. Ditto for most major private  banks.

Safety does not imply solidity. The balance sheets of most banks are suspect.

The risk is that the real return, that is, return net of inflation, may still be negative, especially on a net of tax basis.

As to investing in banks other than the big ones, the less said about it the better. 

Investing in the stock market is highly risky for several reasons. It is a rigged game, where the muppets keep entering only to get slaughtered in hordes. 

Debt mutual funds carry risks as we saw in the case of Franklin Templeton. In search of a little extra yield, they could invest in illiquid  securities of not so strong companies. In case they invest only in 

supposedly safe long dated  government bonds, that carries interest rate risk, which , as the SVB collapse shows, can be deadly. 

Equity mutual funds carry the same risks as investing in direct equity, plus some more. As an individual investor you would never have invested in Anil Ambani's power project or in Nyka. The fund managers, however, are part of a cosy cabal, which believes in mutual scratching of backs, and what the hell, it is not their money anyway.

Every player in the financial markets has an incentive structure that is at variance with the wellbeing of the investor.

The financial markets are a giant suction machine that keep rotating our  money at great velocities, sucking out a little bit in each round, and to add to it, the machine breaks down once in a while.

Gold, as in physical gold, is always safe. It will protect you from inflation in the long run,  but is highly volatile in the short run. However, central banks are scared of gold, in the same way as religions are scared of sex, it is the only power strong enough to threaten their hegemony. So central banks will do everything in their power to curb gold, ban it, demonise it, and in general harass those who hold it. 

Money is supposed to be a "store of value". That is the biggest bullshit fed to us by economists. Economists, by the way, are a totally clueless bunch whose job depends on pretending to be erudite.

An economist consulting a tarot card reader, to raise interest rates, might end up in a better outcome, 

Ditto, an equity fund manager consulting a monkey with a dartboard , to help him choose stocks. 

Cryptos, commodities, options, futures, derivatives, currencies and the like are all  scam games to divest the investor of his money, except that the word investor is inappropriate, hopeful idiots is a better term. In a gambling den, only the house wins. Always.

So then, what to do? 

Money loses value hence one needs to invest in things other than money.

Which things? 

For that, let's go back to the basics of investment.

Anything that will not result in the investor losing his principal. That is the first rule: not to lose the principal.

Anything that is real: that is, is tangible, has a use for someone, and carries real value.

Anything for which the demand from the people will increase over time. Rising demand gets reflected in the price.

Anything that will not collapse overnight, like banks tend to do nowadays.

Anything that has been considered as investment for ages, and will continue to be considered as such.

Anything not subject to black swan events. Black swans seem to be getting  increasingly frequent nowadays. 

Any suggestions? 

Responses are welcome

On food: simple rules, common sense

https://twitter.com/shashiiyengar/status/1634963101853286401?t=J36n50lk4gXy1Cx98nLJ3Q&s=08

Watch the video and be shocked.

The solution is not to have better guidelines and monitoring.

The solution is to cook  food at home, or  order from the neighbourhood auntieji who cooks food at home. 

Avoid all "big chain operations" like McD's , KFC, Dominos, Subway... 

Avoid all processed foods made in a factory.

And then, and only then, go to the next level.

Next level:

Replace refined oil with cold pressed oils.

Replace milk with organic milk, and reduce milk in the diet.

Replace atta with wheat bought by yourself and peesofied in the local chakki.

Replace "table" salt with raw sea salt.

Reduce consumption of white sugar.

Increase organic gud in the diet, by substituting it for sugar where possible.

That takes care of oil, sugar, fat, milk and wheat.

Then, go to the next level. This level is good to have, and depends on affordability and availability.  

Replace veggies with organic veggies.  

Replace fruits with organic fruits.

Then, go to the next level:

Reduce wheat and milk in the diet.

But, throughout, from stage one, continue to have butter, ghee and coconut in the diet. Lots of it.

In parallel: 

Reduce food consumption itself. Eat only "half stomach". 

Have more and more whole foods, less and less carbs, less and less grains, and more and more veggies and fruits. Reduce meat in the diet, and if you eat meat, ensure it is "free range" or "natural" and not from poultry farms or fish farms. Obviously, this means cooking at home since even the best of fine dining restaurants won't follow all this.

If you have allergy issues, or strange stomach problems, first try cutting out milk and wheat from the diet. There is a high probability that the problems will disappear.

In parallel: 

Try and follow the rules of food combination. But that is the subject of a whole separate post, or series of posts. 

Remember, 

The more the food is removed from your direct control or oversight the worse it gets.

The more the food comes from corporates or chains or organisations the worse it gets.

The more the food is commoditised and gets made in industrial kitchens the worse it gets.

The more the deliveries you get from Swiggy or Zomato the worse it gets. 

The more you want "convenience", the worse it gets. 

The more the "western" influence the worse it gets.

The more you follow the advice of your allopathic doctor or nutritionist, the worse it gets.

Each of the above assertions can be the subject of a separate article, but then, why do we need all that?

Common sense should tell you that what I am saying should be broadly correct, and , directionally the way to go. 

The more you go away from common sense the worse it gets.

THE SVB COLLAPSE

So why exactly did Silicon Valley Bank collapse?

They had a lot of money in their current accounts parked at zero percent. All they had to do was invest it in Treasury Bills at say 0.25 percent.

They invested in long dated Mortgage Backed Securities, since they got more return, the exact number is not so important, so let's say  4 percent. 

Now that's a big one. It needs some explanation. What is "long dated" , what is "mortgage backed" etc. etc.

But, before that, what is a bank? A bank is essentially an institution that takes on short term liabilities in the form of deposits, and lends out long term. They lend at a rate higher than what they borrow at thus making a "spread". This spread has to be enough to cover their costs, and bad debts, and yield a profit. 

If they lend long term using money received from short term deposits, they have a problem. If ask the depositors ask for their money back, the bank does not have enough money to repay them. 

Depositors will keep their money with the bank so long as they are assured that it is safe. The moment they feel that the bank is in trouble, they will rush to draw their money out. When more than a particular percentage of the depositors queue up outside the bank, the bank will collapse. Thus, rumour of a collapse becomes a self fulfilling prophecy. 

No Bank in the world can survive a run on its deposits. And every bank lends long term against short term deposits.

The long term securities that SVB loaded up on to make more money on interest , were, from this prospective , thus ok. 

However, they bought long dated government securities with fixed cash flows. Now here's the thing with long tenor bonds. They carry something called interest rate risk. 

What is interest rate risk? Let's say you have a twenty year bond carrying an interest of one percent. And the Central Bank raises the interest rate from one to four percent. Anyone who is investing freshly has a choice. He can buy newly issued  4 percent bonds, or he can buy your bonds at such a price that the "yield" still works out to four percent. Obviously he will pay a lower price for your bonds. 

So, when the Fed raises rates, the bonds that you hold drop in value. Every bank that holds these bonds needs to "mark down" the value of their bond holdings in their Balance Sheet.  This is called mark to market. 

Now, SVB had bought long dates Mortgage Backed Securities, which is an additional problem. The bonds in question were backed by interest payments received from housing loans. Now, when interest rates in the market go up, there is additional stress on people who have mortgages who find it difficult to repay their loans and they can do one of two things: increase their monthly EMI's, or keep their EMI's the same and increase the period of their loans. Obviously, they will mostly opt for the latter. That, in turn, increases the effective tenor of the underlying bonds, which in turn, increases the impact of interest rate increases, which in turn, reduces their price further.

Now, all banks have bonds on their Balance Sheet. They are listed as "Assets". They need to "mark to market" their bonds in the Balance Sheet daily, that is, change the asset values to reflect the current market value. If the value goes up, it's a profit, if the value goes down, it's a loss.

So, that's the background. 

What did SVB do?

SVB had a lot of money parked in their current accounts by depositors at zero percent interest. They could have invested that in 0.25 percent Treasury Bills and their CEO and CFO could have continued playing golf and giving speeches on gender diversity, inclusion, sexual orientation, climate change and the Ukraine war. But what did they choose to do? They of course continued to give speeches on the above subjects - every good US citizen is supposed to do that - but they chose to invest their deposits in long dated mortgage backed securities. 

So far, so good.  Then...

Over the last few months the Fed raised interest rates rapidly. The value of the bonds in the SVB portfolio fell. In their case the fall was steeper since they were all MBS (not Mohammad Bin Salman that great prince villain whose opponents are known to mysteriously disappear, but, you got it, Mortgage Backed Securities). 

Now, SVB needed money. So they sold a large part of their bond portfolio. At a huge loss.  Plus of course, whether they sold it or not, the "mark to market" rule ensured that they "wrote down" their bond portfolio assets, and they suffered a huge loss. This huge loss wiped out their Reserves. They needed to get in additional funds. For which they had to raise equity. Now, they chose a bad time to announce that they needed to raise equity, when there was news in the market of another bank being in trouble. Or, it could merely be the fact that they announced it when the CFO had time between two of her golf matches. We don't know. In any case, the market heard the news, and  what the market heard was "the bank is in trouble". 

So people rushed to transfer their money elsewhere. The rumour spread. More people withdrew their money. 

The share price plummeted - now, that is an entirely different angle, which introduces another dimension. And how the share price plummeted! From around 250 dollars to around 40 dollars. in a few hours. 

Meanwhile, people realised they were not able to withdraw their money. Since the bank had no money.

Who are these people? A lot of them are CEO's of start-ups -  start ups are a special kind of  Ponzi Scheme which is a story for another day - who had parked their hardly earned VC money - oops, that is supposed to hard earned - in current accounts with SVB. 

And the weekend comes. It is Friday evening and the bank people have placed a call to the Fed. The CEO's of the start-ups, are chewing their nails. Everyone is on tenterhooks.

Will the government do it or won't it do it? Do what? Rescue the bank by infusing funds. Whose funds? The taxpayer's funds, obviously. 

We know the answer to that one. If 2008 is any indication. We also know who runs the US government. Wall Street does. As I am about to post this article, breaking news is that the US government has decided to step in and bail out the depositors of SVB Bank. But those who hold equity in the bank or have subscribed to its bonds will be wiped out. Totally.

The CEO's of the start-ups will therefore be able to service their payroll, and in general, continue to burn their VC's money. They are happy. 

The CEO and CFO of SVB will no doubt, meanwhile, release a statement saying:

" We at SVB are a highly ethical bank committed to safeguarding the interests of our depositors and shareholders,  and upholding gender diversity, inclusion, one hundred and twenty five sexual orientations, climate change and we support the government in the Ukraine war".

The headlines in the newspaper tomorrow will say "SVB Bank is not progressive. They support only 125 sexual orientations!"