Selling women short

Yesterday I found an interesting book on the treatment of Wal-Mart towards women, especially from the minority community. It talks about the sex-discrimination at Wal-Mart, and the way these women stick on to jobs for want of better prospects. But promotions elude them, and good positions often go to the men, who are often paid more. Interestingly one women (I don’t remember the name) had to show her monthly bills and expenses in order to justify her higher pay requests. Humiliating no doubt, it shows the state of affairs in the most developed economy, and in the company that tops the fortune 500. high sales means higher revenues for the shareholders, but lower prices leads to lower pay scales. Its indeed unfortunate to find that in an economy, which had a women’s liberation long back, still struggles with such discrimination. Racial discrimination is rampant in these parts, but such things are often uncalled for.

Probably Sam Walton didn’t start this chain with such a philosophy. The well proclaimed pride associated with being a part of the Sam’s club didn’t go well with all the members. Most of them are exploited, and are often forced to continue with the job. The recent report of not even allowing any lunch breaks has added to the existing list of court cases against Wal-Mart. The US government should take some steps to protect the women's rights.

US current account continues to worsen

In response to http://economictimes.indiatimes.com/articleshow/msid-1240066,curpg-1.cms

With manufacturing being outsourced, and now the ‘low end’ services too, US is left with R&D and the typically high end services, which in turn is a fallout of R&D. but in course of time, these high end services would lose their levels, and would move out to the other countries. So innovation is the key to survival.

Cost differential has led to outsourcing of services by companies who are seeking opportunities. This is not unlike arbitrage in the derivatives segment, though with some constraints like red tapism.

It might not be far before US ends up being a gamut of trading companies, with nothing but margins to survive. Manufacturing is already getting locked up at china, while India still struggles to follow. With the world getting eased out, and globalization finding acceptance, it might not be long when free movement of resources, including people would blur any advantage a particular economy might have. Arbitrage opportunities would be reduced, and there would be one free for all economy.

The extraordinary story of Amul

Look at this article

http://in.rediff.com/money/2005/sep/23spec.htm

A plunge of figures

Quite a familiar sight for the day, but none too appealing! The sensex crashed 292 points, and nifty found itself 91 points down. Analysts had cautioned that it was just waiting to happen. With the soaring indexes, market seemed to be headed towards some correction. But this is a correction, or a meltdown, that’s yet to be seen. The market sentiments have been euphoric, thanks to the FII intervention. But the day it stops, who will save the market? Millions of reports and new celebrities are born. This is the most interesting game, even better than cricket; because a lot of stakes are involved. Make a wrong move, and your wealth could go down the drain, or a smart move could give you riches. For now, let’s wait and watch!!

Richard Branson, Oil Tycoon?

I got tired reading about Richard Branson's baloons, his ventures and his eccentricity. But I have always been thrilled reading about this activities. This new venture of oil exploration didnt come to me as a surprise!!

This article on businessweek

Wal-Mart problems

The top ranked company in the fortune 500 isn’t having a good time with its people. Loaded with about 40 cases regarding worker violations only belittles the grandiose of the behemoth. The latest news of workers being denied lunch breaks appears quite inhuman. I remember having read a case on Wal-Mart and its teething people problems. And in spite of this, its value is ostensibly larger than the GDP of many countries.

Now Wal-Mart has shown its interest in putting up an FDI in India. The recent government directive to allow FDI in retail has opened up new avenues for the retail giant, as India is a largely growing market. Rumors say that Wal-Mart is looking at partnering with Reliance, the largest private business house.

So is it that, if the deal goes through, they would have worker problems in India as well? But their bargaining power may not stand with the high degree of unionism prevalent in India. Otherwise why did erstwhile union problem free Haryana have to witness the Hero Honda fiasco?

Wal-Mart may not find India so comfortable if it’s got to employ people. Retail stores can never be fully automated, and with the zealous population of India, it might not be long before the retail conglomerate may have to rethink its strategy.

In response to this article on businessweek

Derivative mutual funds

The SEBI has lifted the ban on mutual funds using derivatives in their
portfolio. Until now, the fund houses could use futures and options
only for the purposes for hedging. It was probably set up keeping the
larger interests in mind, wherein mutual funds are taken largely by
retail investors, who do not have a high risk appetite.

The stakes involved and the volatility of the FO segment did not allow
retail investors their share of the pie. It was largely reserved for
the larger investors, with huge market caps. To buy a nifty index
future lot, one would have to buy 200 nifties, and at the present
value of over 2500, it comes out to be over Rs 5 lakh. Even if a 5%
margin is applied, the amount to be invested is Rs 25,000. Indian
investors do not remain a part of the retail segment, when their
investments cross Rs 50,000. Furthermore, options are coupled with
huge premiums, which are beyond the affordability of the most.

In such a situation, the permission of mutual fund houses to start
funds trading in derivatives has given rise to another round of
speculation. Experts feel that this will increase the liquidity of the
market by some Rs 60,000 crore. The BSE Sensex rose from 8189 to 8283
or 1.148% yesterday, 15th of September. We can expect a lot of
interesting things happening in the next few days.

The smartest guys in the room

Fortune reporter McLean's article in early 2001 questioning Enron's high valuation was cited by many as an early harbinger of the company's downfall, but she refrains from tooting her own horn, admitting that the article "barely scratched the surface" of what was wrong at America's seventh-largest corporation. The story of its plunge into bankruptcy (co-written with magazine colleague Elkind) barely touches upon the personal flamboyances highlighted in earlier Enron books, focusing instead on the shady finances and the corporate culture that made them possible. Former CEO Jeff Skilling gets much of the blame for hiring people who constantly played by their own rules, creating a "deeply dysfunctional workplace" where "financial deception became almost inevitable," but specific accountability for the underhanded transactions is passed on to others, primarily chief financial officer Andrew Fastow, whose financial conflicts of interest are recounted in exacting detail. (Skilling seems to have cooperated extensively with the authors, though clearly not to universal advantage.) A companywide sense of entitlement, particularly at the top executive levels, comes under close scrutiny, although the extravagant habits of those like Ken Lay, while blatant, are presented without fanfare. The real detail is saved for transactions like the deals that led to the California energy crisis and a 1986 scandal, mirroring the problems faced a decade later, that left the company "less than worthless" until a last-minute rescue. The book's sober financial analysis supplements that of Mimi Swartz's Power Failure, while offering additional perspectives that flesh out the details of the Enron story.

Copyright 2003 Reed Business Information, Inc