Putting "Threads" together

By releasing a Twitter clone, under the brand name 'Threads', Meta has started with a big disadvantage, notwithstanding this app garnering more than 10 million signups in the first seven hours of its release.

Simple fact : who prefers a a look-alike when the original is live and kicking ?

While competition is always welcome, the killer strategy is not to be perceived as a clone, but as a much better version which is several notches above the original, in terms of its functionality and usage.

Meta should have ideally worked on reviving the dwindling fortunes of Facebook, which is facing "law of diminishing returns", after the rising popularity of its two other properties - Whatsapp and Instagram, and post the same, should have identified the right gaps to be filled up via 'Threads'.

Yes, users of Instagram can port their followers on Threads, besides creating their own communities on the said platform. But is that a sustainable killer idea to take on Twitter?

Now, for avid users, Twitter will remain the first preference, unless Elon Musk doesn't really push them hard to boycott the platform. But, by appointing Linda Yaccarino as the CEO to focus on improving relationships with patron brands, Musk seems to be all set to spearhead fortunes of Twitter, which has seen significant decline in its ad revenues.

Meta's top brass needs to fight very hard to get over the perception of 'Threads' being a clone of Twitter, and keep a constant vigil via AI related technologies, on the pulse of it's users and patron brands, to sense their changing moods.

Armed with such insights, they need to come up with new features which bear no resemblance to Twitter, before anyone can even say WOW 😊

Reimagining F&B outlets in leading hotel chains

Imagine you are sitting at home, getting bored. Desperately wanting to go out for a meal, and try something different.
 
But there’s a catch. You are too health conscious, and are on self-imposed dietary restrictions, like avoiding too much fats, spices, carbohydrates. Besides, pampering your taste buds, you need to pamper your health as well.
 
You have downloaded an app of a leading hotel chain, having presence all over India as well as in several other countries. You open this app, and press/type or speak-out the option - “health friendly cuisines”. Pat comes few culinary options with their key ingredients, pictures, prices, and the feedbacks from those guests, who have sampled the same. Possibly, reviews as well by some nutritionists regarding the positive impact of those culinary items on one’s health. Some of such culinary options suggested could be those, which have been developed by the Chefs of such a hotel chain in some other city or other country. And of course, the production techniques have been disseminated perfectly, to Chefs in all other locations.    
 
You choose one or some items, make some advance payment on the app itself, and proceed to a particular outlet in that hotel for a meal especially prepared for you as per your preferences.
 
Next time, as and when you open that app, it showcases latest options from other outlets as well in that hotel chain, which have been successfully developed subsequently, and are highly recommended by nutritionists, besides other guests who have sampled the same.
 
Or, you are just sick and tired of having the same types of desserts, and wish to try out something different, which is a real “mood-enhancer” for you, but at the same time caters to your calorie conscious nature. Well, either type out or speak out “mood enhancing desserts within X calories”, in that app. Pat comes some options on similar lines as above. Again, you choose some item/s make some advance payment on the app itself. Then proceed to a particular outlet in that hotel for indulging in such “mood enhancers”, without going overboard in your calorie intake.      
  
And so on….
 
With generative AI tools like ChatGPT gaining wide acceptance, such apps can also have bots which can engage in conversations with their guests, gauge their preferences based on their past orders, thoughts as revealed in the chats, recommend customized cuisines, with their key ingredients, opinions of some nutritionists regarding their beneficial effects on health, and the respective prices.

And above all, with such kind of a disruption, the kind of WOW factor being created, for the patrons of such progressive hotel chains can be well-imagined.   
 
Of course, strong backward integration with the right data sets, and right algorithms to pull the right data from their data lake, and then process them accordingly to deliver the right output to each guest, hold the key to success to such an idea.

Negotiations on US Debt Ceiling:

In all probability, the US will avoid a default, as neither the Democrats nor the Republicans can afford it, especially because of the Presidential elections due next year.

But, as current public debt is already 129% % of its GDP ( as of March 2022), one wonders if a further hike in the same, due to a another hike in it's debt ceiling (79th hike in 63 years) will be negating all efforts of US Fed in combating inflation? Simple textbook economics suggests, that a higher fiscal deficit leads to higher inflation, followed by depreciation of the local currency, in this case the US Dollar.

Now, if the Republicans want a compromise formula, to keep the public debt under control, one can only hope such a compromise will not have it's cascading effects on the US economy in general, and the world economy as a whole.

But, a billion dollar question, that begs an answer is that, "What is the highest level to which US's debt to GDP ratio reach, without significantly damaging it's economy, as well as the confidence in the stability of US Dollar to serve as the world's reserve currency?"

A corollary to the above question is that , "How can the lawmakers focus on substantially increasing the denominator, that is the GDP, thereby keeping the overall percentage of Public Debt to GDP well under control?"

Answer to these questions, could be the "real deal-makers" between President Biden and the Republicans, and also set the tone for next year's Presidential elections.

Great Expectations

It was November 2008. A headline in an issue of Economic Times read, "Don't buy a burger, buy a blue-chip instead." This summed up the state of our stock markets those days, following the collapse of Lehman Brothers.

Most of the market analysts were literally competing with each other, in predicting the next bottom for our stock markets. None of such prophecies came true, and I don't recall reading any suggestion to dive in the stock markets with eyes closed.

Somehow, I summed up the courage to dive in, and after a year, was complimenting myself for my bravado. 😀

Stock markets today, are not at the same levels of that time, though there is certainly lack of enough confidence to dive in. Another Lehman moment is highly unlikely though not impossible. All eyes are on Credit Suisse right now.

Yes, amazing turnarounds are highly likely, which can change the direction of the world economy in no time. China has brokered diplomatic relations between Iran and Saudi Arabia. This should keep oil prices in check, assuming higher supply of oil.

Another diplomatic coup could be in terms of détente between Iran and the US, which is quite likely as US might like to use this to corner Russia, by allowing free flow of oil and natural gas from Iran in return for a quid-pro-quo from Iran in terms of a strategic alliance. This would translate into a rally in the stock markets following further drop in oil and natural gas prices.

And finally, coming to the "elephant in the room" which is hardening of interest rates by Fed etc. If some news reports are to be believed, the genesis of SVB crisis lies in the hardening of interest rates, which led to "funding winter' for some start-ups, which in turn triggered a run on its deposits as such start-ups badly needed funds to survive. That the SVB parked most of its deposits in long-term bonds is another story.

It is now reasonable to expect that the US Fed has taken the alarm signals from SVB crisis seriously, and would signal an end to sustained increase in the interest rates. Why administer a cure for inflation, which is worse than the disease?

Net net, odds are highly in favor of a rally in stock markets, and a sustained global recovery by Q3 of FY 24.

So, it's the right time to take long-term positions in the stock markets, by focusing on fundamentally sound companies with visible earnings in the next few years. Yes, one needs to be like "Rip Van Winkle" till March 2024 at least, after taking such positions. 😊

Reimagining loans disbursements by banks

Banks could  explore  tie-ups with a reputed consultancy organization/s, to handhold some of their corporate loan borrowers, to enable them make effective and efficient use of the loans, as well as guiding them towards path of desired progress.

The associated consultancy organization/s can keep the relevant bank/s, posted regarding the overall progress of such loan borrowers from time-to-time, so that there are no negative surprises when it comes to repayment of such loans. 
  
Those corporate loan borrowers which agree to avail such services by such reputed consultancy organization/s, can possibly be extended loans at a preferred rate of interest, due to relatively low risk element of defaulting or turning into NPAs, whether due to genuine reasons or otherwise.
 
Thus, while such a tie-up can prevent some corporate loan borrowers of such banks, from turning to NPAs, thus proactively addressing "twin balance sheet" problem, it would also help such loan borrowers avoid insolvency related procedures, which may even threaten the very existence of their respective business.

On a positive note, some of such borrowers can also be hand-held towards a better path to progress, which over a period of time could also benefit the relevant bank/s, by giving them confidence to increase their exposures to such entities with relatively lesser degree of risk. This would also ultimately significantly contribute towards our overall economic progress, via giving a boost to employment and aggregate demand.
 
And for the associated consultancy/s, the benefit would chiefly be in terms of greater market penetration, besides adding to its revenues through consultancy fees from that bank/s, as well as from those corporate loan borrowers which agree to avail of their services.  
  

Economic Revival - Some Perspectives

Wish the media also prominently highlights which all sectors or businesses are hiring in great numbers.

Just by focusing on layoffs with every passing day, the fear psychosis even among those corporate honchos who are doing very well in their respective jobs, is likely to be aggravated, thus inducing them to save more and more, in order to "protect themselves" in case they too fall into tough times.

How do we expect our economy to revive, when the discretionary spending or propensity to consume, is being compressed mainly due to fear psychosis triggered by such kind of media reports?

A sermon to all those unicorns which were earlier riding high on the irrational exuberance, due to astronomical valuations caused mainly by easy money. Focus on "Value" and not on "Valuation" now. And, identify successful CEOs or other senior managers who have had proven track records in their respective corporate journeys, but have now "hung up their boots" just because they have crossed their retirement age. Get them on board with active roles to effectively shepherd your ventures, by offering them some equity stake, in return for their services.

Questions on Corporate Governance at ICICI Bank etc

From a Corporate Governance perspective regarding the alleged scam at ICICI Bank, involving it's former MD and CEO, her husband, and the Videocon Group promoter, some questions beg an answer:

a) If indeed there were some well-defined procedures laid out at ICICI Bank, for disbursal of loans beyond a certain threshold value, like in this case to few Videocon group entities, then were the same followed by the members of the credit committee which sanctioned the loans? Irrespective of the fact that Ms. Kochchar was a part of that committee, and did not disclose her husband's business relations with Videocon Group,

b) If Yes, then how come was there any violation of established procedures, and if No, then how come none of the other members of that credit committee are in the dock?,

c) Was this particular loan sanction subjected to inspection by the Internal Auditors of ICICI Bank, and did they make any adverse observations? If Yes, then was this report further elevated to the Board via its Audit Committee, and if Yes what was their observations, and what action did the board deem appropriate? If No, then again it can be deemed that such sanction of loans was well within the established procedures,

d) As and when it was evident that these loans to Videocon Group were about to turn into NPAs, did the credit committee follow the established procedures as laid out for any other such assets turning into NPAs? if yes, then it should have been documented, and submitted to the Board via its Audit Committee,

e) It has been reported that the RBI also conducted a probe, and didn't find anything wrong with the process of loan disbursements. If this is indeed true, then was this not a credible proof of the entire procedure of loan disbursements being above board?

f) And finally, Videocon's investments of Rs. 64 crores in Deepak Kochchar's 'NuPower Renewables'. How was this investment decision arrived at, and did it pass the scrutiny of the Board of Videocon Group, or was it just one individual's decision? Secondly, was this amount invested from the loan amounts from ICICI Bank received by Videocon Group, or was it from other source which had nothing to do with the receipt of such loan amounts? And, above all, which other banks/financial institutions had exposures to the Videocon Group at the time when ICICI Bank decided to sanction such loan amounts? Did any of them even raise a red flag before regarding the finances of the Videocon Group?

While it is assumed that our investigative agencies have done a very meticulous job while investigating such an alleged scam, yet answers to above would greatly serve the interests of 'Corporate Governance' in any financial or other institution, dealing with pubic money.