Credit Score

In the US life seems to revolve around your credit rating. So whether you want to lease an apartment, get a credit card, get a lease on your car, or get a mortgage on your apartment, you need to have a credit rating.

Now whilst this appears fair to most people, the problem is for people like me who have newly moved here. Credit rating agencies base the credit scores on how you've handled credit in the past. However if you are new to the country, you obviously have no credit. And so, no credit score. And so you can't get any credit. And hence will be unable to get a credit rating. And this Catch 22 situation goes on.

The only way out, is to get what is called a secured credit card, which is nothing but a pre-paid card, that takes a fat fee from you to pretend that its a credit card and report your transactions to the Credit Bureau who will begin to track your credit history and so generate against you the elusive credit score.

In my opinion this whole system of credit rating agencies and credit scores has several flaws. And whilst I personally feel victimized by what I believe to be a completely unfair system, there's a much larger macro issue. And it is this issue that in my opinion was a major contributor for the collapse of the housing market and the global financial recession of 2009 from which the world has yet to recover.

To know whether there's any merit in my conclusion, we need to understand what exactly does a credit report do and how. Whilst you can learn more about it by visiting the sites of the various credit bureaus, a quick summary is that the credit score is an indicator of your current record in handling (repaying) credit and therefore your probability of repaying credit that may be given to you. This therefore is used by lenders to determine whether or not to give you a loan as also the rates they can offer you, based on the perceived risk, which is determined by your credit score.

The method used by credit bureaus to calculate the credit score is reasonably simple. Lenders send them a monthly report on their customers, their credit, their payments, their outstanding as well as their defaults. These numbers are maintained by the credit bureau. To calculate a credit score they use an algorithm that basically sees how much credit you had and how well you repaid them. Hence someone who has been using his credit card for a few years, and has always paid his bill on time, will have a great credit score. And a person who has defaulted or missed a few credit card payments, will have a poor credit score.

https://www.transunion.com/sites/personal-credit/credit-education.page
http://www.cibil.com/about-us

So this sounds like a good idea. It measures a trend of taking credit and repaying. And so should be a pretty accurate measure of the persons tendency to pay back lenders. And therein lies the issue. The above makes 1 basic assumption. The first is that a tendency to pay in the past, implies the tendency to pay in the future. And if this assumption is incorrect, the complete credit rating becomes meaningless. And the fact is that this assumption is grossly incorrect.

There are 2 reasons. The first is that the assumption that a person who repays in the past is likely to repay in the future works only when the individual in question is not aware that his behaviour is being measured. The moment he is aware, his behaviour changes. Knowing that not repaying will affect his ability to get credit. ensures that he repays the credit, when the amounts are small and affordable.

The 2nd issue is that most human beings are at heart good. And would like to repay their debts. This is reflected in their credit history being without blemish. The issue is ability. It does not matter about how good his intentions are. When he just cannot afford to repay, he defaults.

And this is exactly what happened. Lenders were happy to lend based on credit scores. And when the housing market stagnated and then prices started dropping, people who had borrowed on the basis of their property appreciating began defaulting. Starting the collapse.And then aggravating it.

You would think that the above is obvious and so after the bubble burst, changes would be made. Guess what. The only change made is that now lenders want to be more careful. And so they will only lend to those with even higher scores than before. Leaving themselves open to the next collapse.

TV Politicians

In the last 2 weeks the Republicans and the Democrats had their Conventions where they formally selected their candidate for the Presidential election in November. And the acceptance speech of the candidate was his opportunity to put forth his credentials before the American people.

Its very likely that the single biggest factor in determining the next President will be Television. The power of the media is to be seen to be believed. The conventions of both the parties lasted for 3 days.

The Republicans held theirs in Tampa, Florida.

The Democrats theirs in Charlotte, North Carolina.

The key speakers were scheduled to speak between 10 and 11 which is considered prime time and all channels cover the convention.

You can check out their websites for the details and much, much more.
Republicans : http://www.gop.com/
Democrats: http://www.democrats.org/

Both parties had their best speakers paraded during that time. The spouse of both candidates spoke on the penultimate day of their respective conventions. And the candidates rounded up the Convention on the final day with their acceptance speech.

To succeed in American politics, its very important for politicians not only to be very good at politics, but also to be Master actors with phenomenal Television presence.

And most of the Speakers were very good. And lived up to the expectations of their party. Each speech was analyzed ad nauseam, by reporters and analysts on various channels. And every newspaper covered it.

Now one would assume that since the whole event is televised live, you would get very similar reports and evaluations. And you couldn't be more wrong.

Every article picked up only those portions of the speech they'd like to attack or defend. And then went ahead and made the speakers look inept, incompetent and in many cases Liars. This is not only acceptable, but considered good journalism.

The biggest difference that I see from the media in India is "Opinion". This in my "Opinion" has more negatives than positives. The positives are rather obvious. It puts forward a point of view and allows the reader to analyze the information from several different points of view.

The negatives are not readily obvious, but could be potentially dangerous. There are 2 main risks. The first is that the political affiliation of the newspaper or channel biases their opinion and then the individual reporter's personal preference also gives different shades to their article and does not allow for an unbiased opinion.

The second is that there is a conflict of interest. Both the parties spend several million dollars on buying advertising in the media. And its likely that the spends and selection of media is likely to depend to some extent on favourable coverage.

The Television show, "The Newsroom" gives an insight into how the media manipulates and is manipulated.
http://www.hbo.com/the-newsroom/index.html

And finally an unbiased opinion on which party is likely to be better for America's economy and thereby for America. After listening very carefully to both parties and their arguments, and analyzing the impact of their policies, the simple answer is "I don't know". The reason is that both parties have spoken in generalizations and like most things in life, the results depend on the execution. So the party that's able to best execute their plan should win.

So here's hoping that the best actors with the most money are also the best executors.

Happy Birthday to me !

Today's my birthday and I was going to write a nice, long philosophical piece. But my elder daughter Freia wrote a blog. And brought me down to earth. With a quick reality check.

I thought you too should read it. 


Sunday, September 2, 2012

Happy Birthday Daddy! :)

So it's my dad's birthday today, and he now lives in the US so I decided to make him an e-card.

(You should look at his super awesome blog)

Initially I thought of writing some senti emo I miss you crap but that's not my style, and certainly not the relationship I share with my dad.

So I wrote him a very old school poem, something I might have written when i was 9.

Check it out-

It's that time of the year again
and boy, you're getting older

Getting closer to the half century,
Getting shinier, getting golder ;)

When everyone tells you how much they love you,
Cause you know, you're quite the star

And how you're so cool and so reliable
(Though honestly, i find it bizarre)

SO instead of telling you today
That you'll always be young at heart

I thought I'll just remind you,
You're really not so state of the art

Like, look at you bro, you're balding
The hair is falling off

Memory failing, ears gone bad
Am I hearing a sustained cough?

My my, it won't be too much longer
Only a matter of time

LOL JK I LOVE YOU DADDY
BUT OMG YOU'RE 49! :O

 
http://www.themumbaigirl.blogspot.in/2012/09/happy-birthday-daddy.html

Wilton High School

Wilton High School was to start on the 27th and the new joiners orientation was on the 24th. Which meant that Reia and I had just 4 days to complete the formalities to get into school. And we were not sure it would get done.

On Monday we visited the school, and submitted all the papers. They were checked and found in order. The only thing they now wanted was the Medical. We were thrilled and expected the Medical to be easy. And that's when we found out how wrong we were. The first few clinics we checked with were booked right through to mid September. And we wanted it done right away. Finally Frank's doc came through and made an appointment for the same afternoon, Monday.

We went for the medicals and they were very efficient. They completed everything, but there was a twist in the tale. The gave her a test for TB. The Mantoux test. And you need to wait 2 days for the results. They would be available only on Wednesday afternoon. This was cutting it close. We had to get the tests submitted, get admission papers submitted, get approved, meet with a counselor, get classes assigned, all by Thursday. Not happening, we thought.

Anyways, Wednesday afternoon, we headed for the doctors office. Fortunately all of the tests and results were fine. It was just 1.30. We decided to take a chance and see if we could submit the papers at school. Luckily they were there. And kind enough to entertain us. The nurse went through everything and found that 2 vaccinations were missing. Oh No.So we find a local clinic. Luckily they carried both the vaccines.

By the time we finished, it was 4.30. The school closed at 3.30. We decided to take a chance. And went back. Although the nurse had left, the Registrar was kind enough to accept the papers and would upload it into the system the next day. And the counselor would get in touch. They were busy. And would most likley get in touch next week. But they would see what they could do.

We had our fingers crossed. And luckily, Thursday afternoon the counselor calls. The admission process is complete. Can we see her that evening, so that Reia's schedule could be finalized. Of course we would meet her. So we rush to the school, meet the counselor who's working late. She is very good and completes assigning her classes and she's all set for the orientation.

Reia attends orientation on Thursday and is now all set for school starting Monday. When we arrived, we knew it would be a challenge to get her into school on time. It was a challenge, but it happened. Thanks to all of the wonderful people at Wilton High School and Franks doctor.

With an auspicious start, I'm sure she's going to have an enjoyable schooling at Wilton High School. All the best Reia !

New Beginning

I arrived in the US a couple of days ago. I've been transferred to the US Office and so am likely to be here for the next 2 to 3 years.

 

During the journey I flew Air India, and had quite a few things to say. Mostly not too nice. And had decided that this blog would be about all the things wrong at Air India. And then I thought about it. There were several things wrong with the world. And with me. Maybe this time, I should forget all of that.

I also had a lot of opinions about people. Friends, Colleagues, Associates. On several occasions I felt that the manner in which people had behaved was unfair, mean, back stabbed, betrayed, ... And this affected the way I interacted with them.

Now that I'm starting a new innings, maybe its time I wiped the score board clean. And have a new beginning. Starting now, the only memories I carry forward are those that are nice, positive and memorable. Everything else is history.

Its a NEW BEGINNING.

Commitment

Something that everyone talks about. very few practice. So like most, I too considered myself an expert on commitment. Until I was asked to write an article on it. And that was the first hurdle. I said "Yes", because I didn't know how to say "No". Later I was wondering whether I had to write, and had a list of reasons it made no sense, starting with, "I don't write very well", to "They don't really expect an article from me", to "There's too little time to write something meaningful", ...

And that's when the irony of the situation hit me. Here I was trying to wriggle out of a commitment to write about commitment. And if I believed that its important, the best way to do it would be to pen this article. I thought about writing about what is commitment and why its important and stuff like that, until I reialized that all of you already know all of this. So what is it that I can say that might add value to you.

And then it hit me. A wise man called Einstein once said,  “Everything should be made as simple as possible, but no simpler.” And what better way than to have a list of simple but practical rules, which I've called the "10 Commitments".

1. To commit is human. To break it is even more human.
2. Don't say Yes, when you mean No.
3. Intentions have no value, until executed.
4. Evaluate realistically before committing.
5. Don't procrastinate. Its the no. 1 commitment killer.
6. Commitments can be expensive. Check affordability.
7. Under Commit. Over Deliver.
8. Say what you mean. Mean what you say.
9. Keep your promises.
10. The difference between good and great is commitment.

The question that begs to be asked is why on earth should we be concerned about commitment. What difference does it make if we don't always do what we were expected to. And the answer is pretty simple. Whilst there are obvious moral and ethical reasons to keep your word, in today's world the primary reason remains the bottom-line. And no matter what field of work you are, if you are able to create a perception of "... keeps commitments", the rewards in terms of delighted stakeholders is immeasurable.

And if you agree with the above, you should make a commitment right here, right now, to keep your commitments and you can start by sending me a mail with your feedback and thoughts. Now !

Procrastination

I'll be writing this blog soon. Really soon.