India: Day 3

I finally got some time to write about my travels to India. I landed into Mumbai on Monday night and the last two days have been slammed with work. Getting to India took forever, a total of 36 hours door to door. This was my first time flying into Kuala Lumpur and it was a pretty nice airport. On my way back to the US on July 22, I will have some time in Kuala Lumpur and will be able to checkout the tallest building in the world – The Petronas Towers. You know you are in India the second they open the airplane door and the rush of humid air with the Indian “scent” fills the cabin. On the taxi ride to my cousins place, you just can’t help but try and reason the deep desparity between the poor you see on the streets and the amount of money coming into the Indian economy. But, enough of that. The monsoon have not been as bad as I thought, I thought it would be hours and hours of rain, but instead it’s brief 10-15 minute rains then it stops. But damn, the roads are bad to begin with and with the rains it’s even worse. I’m surprised not everyone owns an SUV here, if their is any place you need an SUV this is it, not some nice and shiny E-class benz or Lexus LS430. Hopefully, my next post will talk about the Bombay nightlife, I’m on the verge of overcoming my jet lag.

New video from Karmacy

The group Karmacy which is under the label Rukus Avenue has released its newest video “Blood Brothers” and it’s friggin’ awesome (could also be their first) (their first video was “Passage to India”) . The video has subtitles for the Gujarati words as the song is a mix of Gujarati and English, full lyrics can be found here. The song actually has meaning and i’m sure some people can relate to the overall tone of the song. Great job, guys.
download clip (9.7mb, windows media format, 4:08 minutes)

Lately, its been all about 4H

No, not the 4H program people joined in high school. Instead i’m talking about the 4 H’s that have recently been plastered all over the business publications – hedge funds, healthcare, housing and lastly Hindustan (another word for the entire Indian subcontinent).

Hedge fund have been getting an insane amount of press for several reasons, the amount of capital that is coming into the funds, lack of SEC oversight and the GM/Ford debt downgrade scare that many people thought would slam many hedge funds. The reality is that very few funds were on the wrong side of the trade in regards to the debt downgrade.

Healthcare is a systematic problem that no one wants to touch with a 10 foot pole, it’s like a hot potato. When GM announced disappointing earnings it talked about its rising healthcare costs. Every big company is under pressure to cut benefits, but no company seems to want to take the health care providers to task and hammer out a solution. Till then the costs will continue to rise.

Housing is out of control in several markets including where i live in Los Angeles. I have seen houses near where i live double and even triple in price and there seems to be no end in sight. The main driving force behind this pricing boom is with the use of “interest only ARM’s.” In Southern California in 2001, under 2.0% of the mortgages were “interest only ARM’s”, however today the number is just north of 50%. I’ve been calling for a crash for 3 years and have given up on calling it.

Hindustan (aka India) – This is the place to be for business. Every private equity house is setting up shop in India, hedge funds are rushing in and most surprising is the number of new airline carriers coming online. At the 2005 Paris Air Show, many of the largest deals signed by Boeing or Airbus were from Indian carriers such as Jet Airways, IndiGo and Kingfisher Airlines.

PartyGaming to IPO on London Exchange

UPDATE: Party Gaming is finally trading, click for latest quote. Party Poker the flagship gaming site of Party Gaming is the largest online poker brand in terms of number of players and overall revenues. PartyGaming will sell shares to raise close to USD $2 billion. Anurag Dikshit, group operations director, is the biggest shareholder with a stake worth $3.6 billion at the mid-point of the indicated range. Vikrant Bhargava, its marketing director, has a stake worth $1.2 billion.

What's wrong with GM?

On Tuesday, GM CEO Rick Wagoner spoke at the company’s 97th annual shareholders meeting and admitted there were some very deep problems at the company. He gave all sorts of reasons for its current situation including the often cited “rising health care issue.” However, most “car guys” will say the chief problem is lack of desireable cars. Most will contend that GM’s current stable of cars are lame and perfect for the rental car companies. If you open any car magazine and look at the 12-18 month roadmap, there aren’t too many from GM, although during the shareholder meeting they insisted there was going to be an avalanche of new car offerings. Plan and simple, they need to get back to basics and build cars that people want. I don’t know how a company as large as GM lost its vision. Take for example, the Saturn car division after 10 years and $10billion invested it has yet to turn a profit. The Pontiac Aztec is just plain junk, anyone who was on that design team should be part of the first wave of layoffs. Lastly, they need to deep six the Buick division, does anyone actually believe that Tiger Woods is driving around in a Buick with his model-wife? The only bright spot is the Cadillac division, it basically was able to change it’s marketing message from “grandma and grandpa” to the “G-Unit” crowd (read: hip-hop culture). In addition, it understands the current horsepower race that is going on between German car companies and is producing high output cars to meet the demands of the market. Another bright spot is the new 6th generation Corvette, it is very slick and can compete with other high output sports cars. Stats:
– GM is the largest private provider of healthcare benefits with 1.1m members (compare that with Kaiser Permanente which has 8.2m members)
– 450k are retired
– $1500 is spent on health care costs per car
– GM factory workers contribute 7% towards health care costs, salaried GM employees contribute 27% and the average American contribution rate is around 32%
– GM spent $5.2b last year on health care, they are on track to spend $5.8b this year

Peugeot 206 commericial…Indo Style

The Peugeot 206 commercial called ‘Sculptor’, focuses on a car from the 1950s that gets ‘re-designed’, with the help of an elephant sitting on its hood and turned into a 206 look-alike by a young man who dreams of owning one and impressing the girls. It was shot in India and involved a casting session of 100 elephants to find the right one to play the starring role. The background music is by Bhangra Knights and the track is called “Husan”. click here to download (2.8mb, quicktime, 30 seconds)