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Tuesday, July 31, 2012

Tow Indias: the Gita tells us to discard our ego, but the Indian today wants to show off

Healthy food and beverage business offsets dip in occupancy at 5-star hotels in India - The Economic Times: "Unlike in our central Delhi hotels, we price our F&B offerings very competitively so that the aspiring middle-class customer can dare to come in and at least try once," says Rubal Chaudhry, general manager, Hilton Janakpuri. Five-star hotels are also seeing increasing demand for parties and weddings.

"People today want to get identified and show off, and a party at a five-star hotel does help," says Dinesh Khanna, executive director, Eastern International Hotels, which owns the Novotel Hotel in Juhu, Mumbai and the Majorda Beach Resort in Goa.

While occupancy at the group's Novotel Hotel has declined by 10-15% in the wake of slowdown in corporate travel, the hotel's high-end restaurant Olio continues to do brisk business.

"There is a buzz in F&B even now. Personal spending hasn't been impacted one bit," says Khanna. According to the hospitality industry, there has been no let-up in splurging at weddings and parties at five-star hotels despite talk of an economic slowdown."

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The genius of analysis - the face of facebook

Facebook sinks to record low as doubts grow - Yahoo! Finance: "Wall Street is also bracing for a potential deluge of hundreds of millions of shares after August 16, when Facebook employees can sell their company-awarded shares for the first time.
"It's a combination of the Bernstein note, and partly complaints about the Facebook bot. Lockups are also causing pressure on shares today," said analyst Herman Leung of Susquehanna Financial Group, which owns and is a market maker in Facebook shares.
"People are just wondering what the next update is, and there's more headwinds than not. But the long-term story still feels intact.""

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The U.S." moan and groan" at work

BBC News - China swimmer Ye Shiwen clean, says BOA boss Moynihan: "Teenage Chinese swimmer Ye Shiwen is not a drug cheat, the British Olympic Association's chairman has said, after a US coach cast doubt on her world record-breaking swim.

Lord Colin Moynihan said Ye, 16, had passed drug tests, was "clean" and deserved recognition for her talent.

Ye smashed her personal best by at least five seconds in the 400m Medley.

Senior US coach John Leonard said her performance was disturbing and hinted that doping could have been involved."

Monday, July 30, 2012

General Mills: The "All Natural" in advertising, all artificial in truth

General Mills forced to defend 'natural' labeling - Yahoo! Finance Canada: "The lawsuit, filed in the United States District Court for the Northern District of California, charges General Mills with false advertising and anticompetitiveness under California law. It is the latest in a series of lawsuits against General Mills over labeling.
At issue are three ingredients — the sweeteners high fructose corn syrup and high maltose corn syrup, and maltodextrin, a thickener than can also impart a slight sweetness to food.
“High maltose corn syrup and maltodextrin are highly processed, do not exist in nature and not even under the most elastic possible definition could they be considered ‘natural,‘ “ said Michael F. Jacobson, executive director of the Center for Science in the Public Interest, an advocacy group that works on public health issues and is serving as co-counsel in the lawsuit.
The center said it had previously raised concerns about the “natural” claims on Nature Valley products with General Mills in 2010 and that the company had taken high fructose corn syrup out of most of them, but had not removed the other two ingredients."

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Sunday, July 29, 2012

Missing the main function of algebra, and the main function of education

Dr. Hacker asks whether it is necessary to  learn algebra in schoool. Unfortunately he misses the whole point of learning mathematics, and the purpose of education. Basic mathematics, like sciences and arts, exercises the brain in multiple ways and contributes to the development of the educated mind. Learning algebra enables one to formulate and solve problems in a systematic and rigorous manner, a sorely needed skill for all citizens.

Is Algebra Necessary? - NYTimes.com: "There are many defenses of algebra and the virtue of learning it. Most of them sound reasonable on first hearing; many of them I once accepted. But the more I examine them, the clearer it seems that they are largely or wholly wrong — unsupported by research or evidence, or based on wishful logic. (I’m not talking about quantitative skills, critical for informed citizenship and personal finance, but a very different ballgame.)

This debate matters. Making mathematics mandatory prevents us from discovering and developing young talent. In the interest of maintaining rigor, we’re actually depleting our pool of brainpower. I say this as a writer and social scientist whose work relies heavily on the use of numbers. My aim is not to spare students from a difficult subject, but to call attention to the real problems we are causing by misdirecting precious resources."

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Romney- licking his Horlicks

Forget Romney's gaffes – the real worry is he has got nothing to say | Henry Porter | Comment is free | The Observer: "How is it possible for a competent and fluent person such as Mitt Romney, a man who founded a successful private equity business, saved the Salt Lake Olympics, and was governor of a state, Massachusetts – turning round its finances and, in the process, showing glimmers of enlightenment in health and gun control – to make such a complete and utter Horlicks of his visit to London on the eve of the Olympics? All that is required of any foreign personage is to speed along the line of greeters, murmuring: "Jolly good show – carry on.""

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Saturday, July 28, 2012

Speaking openly, no sh**

India is world's capital for open defecation: Jairam Ramesh - The Economic Times: "NEW DELHI: Terming India as world's capital for open defecation, Drinking Water and Sanitation Minister Jairam Ramesh Thursday said that 100,000 "bio-toilets" will be installed in about 300 backward gram panchayats in the next two years at a cost of Rs.150 crore.

"We are the world's capital for open defecation. It is a matter of shame, anguish, sorrow, anger," Ramesh said, noting over 60 percent of all open defecation takes place in India."

Corruption, flying high...

Why Vijay Mallya's Kingfisher Airlines is still not grounded - The Economic Times: "In a statement, the ministry said an airline's operating licence cannot be cancelled anywhere in the world for merely failing to pay salaries and therefore, Bhatia's comments are "uncalled for and baseless".

What the Rules Say

The ministry has based its argument on a DGCA rule that allows an airline to operate if it possesses five aircraft and has a paid-up capital of at least Rs 50 crore. For more than a year, Kingfisher has been cancelling scores of flights. It is carrying a debt of more than Rs 7,000 crore and liabilities of over Rs 4,000 crore.



It has terminated international flights. Once India's second-largest airline, its market share has shrunk to 5.4%, the smallest among Indian carriers. Lessors have been confiscating its aircraft, significantly reducing its fleet of 64 since last September. But Kingfisher still operates 16 planes.
"

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The booze battle - The Irish Times - Sat, Jul 28, 2012

The booze battle - The Irish Times - Sat, Jul 28, 2012:We know that Ireland has a drink problem, but how to tackle it has become a fight between politicians, lobby groups and the alcohol industry. How will we wean ourselves off the drink, asksPATRICK FREYNE 
FIRST THE GOOD NEWS. The awareness campaigns have worked. We are now very aware of our drinking. We are also aware of a whole range of drinks products readily and cheaply available on the supermarket shelves – and, as a nation, we continue to drink them, fully aware of it.
Eighty-five per cent of us believe we drink too much, according to an Ipsos MRBI poll this month for the Health Research Board. Seventy-eight per cent believe the Government has a responsibility to address the issue, and 58 per cent believe it isn’t doing enough.
This follows decades of mixed-up thinking, in which successive governments bemoaned our drinking culture on the one hand while taking the tax revenue and liberalising the industry on the other. In this environment, soft rhetoric about education and awareness was the easy option. But policymakers have concluded more recently that the Irish will moderate their drinking only once price, availability and marketing are curbed.
Minister for State for Primary Care Róisín Shortall is pushing proposals based on February’s report from the National Substance Misuse Strategy Steering Group. These firmly target issues of price and marketing and will, if passed by the Cabinet, form the basis of a new public-health Bill and the fulcrum of a raft of new alcohol policies.
The statistics have always been stark. The Irish recently came top of the Eurobarometer for heavy drinking. Twenty-eight per cent of Irish drinkers binge-drank and 56 per cent overall drank harmfully, according to a Slán survey of 2007. And Ireland’s per capita alcohol consumption was 11.3 litres per adult, compared with an OECD average of 9.1 litres, according to OECD Health Data 2011. This behaviour is not without consequences. The health, crime and child-welfare ramifications of this national pastime cost an estimated €3.7 billion a year.
“While drink has always been part of Irish culture, the data suggests that the amount of drink we’re taking increased rapidly up to a peak of about 10 years ago,” says Dr Joe Barry, professor of population-health medicine at Trinity College Dublin and a member of the National Substance Misuse Strategy Steering Group. “We passed out countries like France that formerly consumed more than us. As we became wealthy we could afford drink, and when we could afford it we drank more.”
James Doorley, assistant director of the National Youth Council of Ireland, explains how the context has changed for young people. “In the past 10 years or so we’ve seen prices come down, we’ve seen much more advertising targeting young people and much more availability. Twenty years ago if a young person wanted to get access to alcohol it was at a local off-licence or pub. It wasn’t everywhere. Now there’s a lot more alcohol available and it’s much cheaper.
“The youth workers that we are engaged with are saying that things have changed. Twenty years ago people were drinking under the age of 18 but they were drinking wine and beer. Now it’s spirits, and they’re drinking more and younger. They’re also turning up with serious liver problems at a younger age.”
It has been convenient for politicians to assume that liberalisation of the market could be balanced out by education and awareness programmes. But public-health experts say education, on its own, is one of the least effective ways of addressing the issue.
“The uncomfortable truth is that advertising is also a form of education, and some of the best brains of that industry are working on drinks ads,” says Barry. “They’re educating people to drink. Expecting state education schemes to compete with that is unrealistic. The effect is completely asymmetrical.”
The reality, says Barry, is that when you increase availability and reduce price, Irish people drink more. So those concerned with formulating policy around alcohol favour the World Health Board framework, which, among other things, targets pricing, availability and marketing. The World Health Organisation guidelines are echoed in the steering-group recommendations advocated by Róisín Shortall. These follow in the policy footsteps of another hard-drinking nation.
“Scotland is leading the way in many respects,” she says. “They’re currently facing a challenge on the basis of EU competition law over minimum pricing and have gathered a very substantial body of evidence, some very significant research done by Sheffield University, making a case on the European level that the negative health impact outweighs competition concerns. I’d be keen that we wouldn’t just leave it up to Scotland to fight this battle alone and should row in to support them.”
The headline issues in Shortall’s proposals include a minimum price for alcohol, a 9pm watershed for drinks advertising and the phasing out of alcohol sponsorship of sporting and cultural events. The latter point is contentious for some of her colleagues, most notably Minister for Sport Leo Varadkar and Minister for Agriculture and Food Simon Coveney. This has led to some procrastination.
“My understanding was that it would go to the Cabinet last week, but I understand that the decision has been taken to refer the memo and the plan to the Cabinet Committee on Social Policy,” says Shortall.
On sport sponsorship in particular, she says: “The recommendation of the steering group was to ban sponsorship by 2016. I think that’s a bit too ambitious given the levels of debt in some of the sporting organisations, and it’s certainly not my intention to damage sport in any way. But I think the vast majority of people accept at this stage that we need to break the link between sport and alcohol. And the issue is not whether we do it or not, it’s about when and how we do it.”
But Varadkar does not sound as if he’s willing to move on the issue. “Anything done must be workable, proportionate and evidence-based,” he says. “It’s clear that cheap alcohol is a big problem, and a minimum price makes sense if it does not violate EU competition law. A ban on sports sponsorship is not proportionate or workable or evidence-based. Sport is international, and the images will be on TV anyway . . . A unilateral ban would achieve nothing, but millions would be lost to sporting organisations and clubs, undermining their work and harming health.”
Fiona Ryan, chief executive of Alcohol Action Ireland, is unsurprised by the delay. She lists all the working groups, Oireachtas committees and liquor-licensing commissions that have been established since 1990 (11 committees and 15 reports in total).
“I managed to have a baby in the middle of one of them, came back from maternity leave and it was still going on,” she says. “The fact is there’s a vested economic interest and its primary goal is to maintain profits. Meanwhile the public-health goal is to reduce alcohol consumption in order to reduce alcohol-related harm. There is no middle ground.”
Many in the industry itself are troubled by Shortall’s proposals because they aim to reduce overall consumption. “They prefer to say, ‘No, we really need to target the problem drinkers,’ ” says Joe Barry. “The difficulty in Ireland is that we have a lot of problem drinkers. Most adults drink over what’s recommended. The industry says ‘drink sensibly’, but when you ask someone if they drink sensibly, unless they’re an outrageous alcoholic, they usually think that they already do – ‘I can take my six pints!’ ”
It’s arguably part of a wider ideological change. Individual choice, value for money and self-regulation have been rallying cries for the modern consumer and truisms of modern governance. The notion that our free, unfettered individual choices together amount to something rational and sane is appealing, and hard to shake. But in this instance the rational and sane approach seems to be regulate the product more strongly.
“It’s not rocket science,” say Fiona Ryan. “We know that if you want to reduce alcohol harm you’ve got to reduce consumption, and if you want to reduce consumption you’ve got to tackle pricing, availability and marketing. We know this from the World Health Organisation and from all the data available. It’s not a moral position. It’s a scientific one.
“In Ireland, up until now we’ve implemented policies that do the reverse of the WHO recommendations. In the same year that they recommended we tackle pricing, we cut excise duty by 20 per cent. We’ve increased availability by 161 per cent during the boom period. When they said to tackle the marketing of alcohol, we put alcohol on the same shelves as bread and milk in a supermarket. We treated it as a grocery, not a licensed product. And this is in a country where the fallout from alcohol abuse costs €3.7 billion a year. You need to have a black sense of humour in this job.”
Tried and tested: What we've done in past attempts to cut our consumption 
Abstaining 
There’s a long legacy of abstinence in Ireland from Fr Mathew’s 19th-century temperance movement to the 125,000 contemporary members of the Pioneer Total Abstinence Association. One in five of Irish adults does not drink (although the numbers are dropping). Today, abstinence is seen as a lifestyle choice or a response to an addiction. The Pioneers, however, like other temperance movements, have a wider social vision, with members abstaining for the good of society.
“The aim of the association is the promotion of moderation primarily in the use of alcohol but also moderation in all of God’s gifts in every aspect of life,” says Padraig Brady, chief executive of the Pioneers. “The pioneers themselves go one step further, and because alcohol is a gift from God and good if used wisely, they take the step and decide to abstain from that for the greater good.”
Fiona Ryan of Alcohol Action Ireland isn’t sure abstinence is hugely relevant to contemporary policy approaches. “The Pioneers are coming from a spiritual and moral perspective and we’re coming from a health, economic and scientific perspective. Their approach is about individual choice while ours is about population-wide initiatives to affect overall levels of consumption. If you have a high level of abstention in a population it’s going to bring down your overall levels of drink consumption, but it’s very much an individual choice and it’s stemming from a particular religious cultural legacy.”
Nonetheless, Brady notes an uptake of interest from people who want to take up a short-term pledge in recent years. “The short-term pledge has always been there. People would give up for the Holy Souls or Advent or Lent, but now it could be any month of the year. There seems to be more of a demand for it at the moment.”
Drinking like a European 
In 2005, as minister for justice, Michael McDowell, acting on recommendations from the Commission on Liquor Licensing, proposed licences for European-style cafe-bars. “The idea was to stop people binge-drinking,” says McDowell. “The report advocated the creation of a cafe-bar society where people would have food with their drink and wouldn’t stand in the pub lorrying in pints.”
But McDowell’s plan was scuppered by the vintners’ lobby, which was “firing on all cylinders at the time. Pubs were still full. Their licences were very valuable and they didn’t want any further competition. None of them could envisage a situation where they would have to consider diversifying to get customers in.”
He got little support from his Dáil colleagues. “I was surprised by the vehemence of the response. Fianna Fáil had a very significant publicans’ lobby, and they had an informal deal with the publicans that they would nominate a publican spokesman to the Senate. And Bertie did the agnostic on it. He was neither in favour nor against it. I thought the opposition would try to embarrass me by voting for it, to divide the government and put pressure on me personally. But they let me off the hook by joining in and kicking me to death in public. It was all over in six months. I announced the cafe-bar idea on April 15th and the whole thing was effectively killed in November.”
Dr Joe Barry, professor of population-health medicine at Trinity College Dublin, says McDowell’s plan wouldn’t have worked anyway. “He was advocating new licences that were better, but he wasn’t doing anything about the problematic ones that were already there. I suspect that the cafe-bars would soon have been full of the foreigners and the superpubs would have been full of the Irish.”
McDowell observes how things moved on. “We were against superpubs at the time because we thought they were leading to uncontrolled drinking – enormous drinking barns with 500 or 600 people swilling drink. Now the problem is that people aren’t going to pubs at all and are drinking at home. It’s a moving target.”
Drinking Better 
Drinkaware.ie, operated by the drinks industry’s not-for-profit Mature Enjoyment of Alcohol in Society group (Meas), aims to educate people about responsible drinking. Meas’s chief executive, Fionnuala Sheehan, speaks of “creating a brand for drinkaware.ie. We need to be challenging in our voice and not to be judgmental. The development of the approach – the messaging – is evaluated on a regular basis, and we benchmark it on at least an annual basis as well.”
She stresses that over the past decade drink consumption has come down 20 per cent and that Ireland’s problematic relationship with drink predated the Celtic Tiger and the age of mass marketing. She also rejects the notion that if drinkaware.iewere too successful it would conflict with the industry’s interests.
“We’re very clear that if underage drinking stopped it would be no problem as far as Meas is concerned. If people drink in a more moderate way that’s absolutely no problem as far as Meas is concerned.”
Others are sceptical. “I dont accept that the alcohol industry can be in charge of alcohol-awareness or -education programmes,” says Minister of State for Primary Care Róisín Shortall. “Their objective is to sell more alcohol or at least maintain the existing level of consumption.”
Indeed, the site’s messages about moderation are illustrated by jaunty bottles of beer and appealing pictures of pints. “Do you think beer shouldn't look nice?” asks Sheehan when this is mentioned. “This is about reaching the people who drink. The way we communicate is in keeping with that.
“Eighty-per-cent-plus of people drink in Ireland, and we’re starting where the consumer is. We are doing everything we can do to get across to them that when they drink they should do so in a moderate way, and we give them the strategies to do that. I know from the research that if we put up pukey green pints, we’d lose them.”
'You always have the sip-and-grin moment in beer commercials' How drinks advertising works 
“Drinks budgets tend to be large, which is why advertising creatives like to work with them,” says Eoghan Nolan, executive creative director with Leo Burnett and Brand Artillery.
“You get the best directors, the best music, because the volume of revenue that can be gained by the drinks company is proportionate to the money they’re willing to spend getting it.”
But, he says, “I think within agencies now you will have people who aren’t happy to work on drinks brands, in the same way I recall people not being happy working on cigarette brands.”
When it comes to advertising alcohol there are a few generic tricks. “You always have the sip-and-grin moment in beer commercials. Guinness is seen as a contemplative drink, and there’s always a bit of hankering to add that in.
“Everything is researched to death, because 21- and 22-year-olds are a very tough audience – critical, visually literate.”
And, yes, the primary target is young. “You would often hear people say they hate a certain ad, and I’d say, ‘Are you an 18- to 24-year-old male? If not then it’s not aimed at you.’ You tend to make a drinks decision at that age and you tend to stick with it.”
Nolan says alcohol advertisements are already heavily policed by the Advertising Standards Authority, the drinks industry itself and the media organisations that carry them, and he is unsure if further curtailment is helpful.
“If I said it wouldn’t make any difference, that sounds like I don’t believe advertising works at all,” he says.
“Advertising does add cachet to a drink choice. Do I think that if advertising was cut, recruitment might slow into drinking and that it might help more lifestyle decisions to be better balanced? I think yes. But I don’t think it’s the only factor . . .
“And I’d worry that if we nanny ourselves on the issue where would it would stop? Do we not show Mad Men? Do we not show Sex in the City? Do we curtail anything we think glamorises alcohol?”

Friday, July 27, 2012

Indian (slavish) fascination with foreign labels - is it in the psyche?

Indian brands with foreign labels like 'Munich Polo' make name for themselves - The Economic TimesNEW DELHI: Pick the odd one out: Zara, Tommy Hilfiger, Munich Polo, Skechers and Pavers. Answer: Munich Polo. Reason: It's the only Indian brand amongst the lot of global labels.
As the rush of single brands into the country-including those that have applied for approvals-peaks, a number of home-grown, international sounding brands are melding themselves into the retailing landscape.

"The trend will gather momentum," says Piyush Kumar Sinha, professor in retailing and marketing at IIM, Ahmedabad. Indian brands will try to look and sound foreign to make the most of rising aspirations of foreign-label fascinated Indians, he adds.

Munich Polo, which has positioned itself as a German brand and recently rolled out its premium kidswear stores in New Delhi, is the latest addition to the serpentine list of home-grown brands flaunting foreign tags. This include Da MilanoFranco LeoneLa Opala and Monte Carlo.


Munich Polo uses the German language and depicts Munich's rich cultural history on its website. It draws inspiration from Munich's heritage for its apparel designs, and uses fair-skinned child models to give the brand a German look and feel. When contacted, a Munich Polo spokesperson did not comment on why the brand has appropriated a German name and positioning.
Another local brand Da Milano, a high-end leather accessory label, is widely perceived to be of Italian origin. Company officials refused to comment on the brand's local origin.

Franco Leone, a Delhi-based premium footwear brand, has an explanation for its Italian-sounding name. "My father bought the brand from two Italian designers called Franco and Leone," says Vikram Bhamri, director of Franco Leone.

But why did the brand continue to use a foreign name in India? Simple, it makes immense business sense. "It has to do with the Indian mindset. We love and easily accept European and American fashion because it is aspirational," adds Bhamri, who roped in Bollywood star Ranbir Kapoor as brand ambassador last year.

Bhamri himself is one such consumer who would prefer a foreign brand over an Indian one. "Despite the high quality of Liberty (Shoes), I would still prefer Lee Cooper because of its foreign tag," he shrugs.

For Monte Carlo, a 26-year-old woollen wear brand from the Ludhiana-based Nahar Group, having a foreign name does have some advantages, but it has to be reinforced by quality of the product.

"The name is built by customers, not by brands," says Sandeep Jain, executive director of Monte Carlo Fashions, which was hived off from Oswal Woollen Mills of the Nahar Group last year. 100% foreign direct investment for single brands will only help raise awareness of their local counterparts, he argues.

Veteran adman Piyush Pandey thinks a foreign brand can be a double-edged sword. If it doesn't deliver its promise, it is doomed to bomb. "Consumers are not stupid, says the executive chairman & creative director of Ogilvy South Asia. "You can fool them once, but not twice. If you claim to be an Italian brand, then you have to deliver Italian quality. If you don't, people won't buy it."

Pandey turns the trend of foreign-sounding desi brands on its head by pointing to international brands with Indian names. Like French jewellery house Boucheron that has a perfume exotically branded Jaipur. "Now, calling it Jaipur doesn't make it an Indian brand, does it," asks Pandey.

Hyderabad - Where Facebook is booking its growth

Giant leap for hiring: Facebook, Amazon lease space in Bangalore, Hyderabad - The Economic Times: "BANGALORE: Some of the world's biggest technology companies have booked acres of office space in Bangalore and Hyderabad, real estate agents said, indicating that investments are proceeding apace in the software sector despite a generally gloomy mood for businesses.

Facebook, Amazon, Xerox and chipmaker AMD are among the companies that have leased office space in India's technology capital Bangalore, or in Hyderabad, which is home to companies such as Google and Microsoft."



Including tax preparation software maker Intuit, these five companies have in recent weeks leased more than 6 lakh sq ft, a precursor to hiring thousands of professionals.

The general rule of thumb is to provide 75-80 sq ft of usable space for every employee. By this estimate, Facebook's Hyderabad office can accommodate approximately 500 staff and Amazon about 5,000.


Analysts said the plans are a testament to India's continued attractiveness as a source of technology talent for top international corporations, which have made a long-term commitment to India.

"For companies that believe in the long-term story of India, this is probably a very good time as you can get real estate and talent at relatively lower cost," said Sunil Chandiramani, national director for advisory services at audit and consultancy Ernst & Young. "The fact remains that India represents a large consumer base. Growth may be muted now, but it is still a growth story."
Facebook, which set up its first local office in Hyderabad in 2010, raised $16 billion in a share sale in May and has said it regards India as one of its most important markets.

Amazon, which entered India through Junglee.com earlier this year, has a development centre in Hyderabad.

Hirings on Despite Slowdown 

The Amazon centre in Hyderabad creates solutions for the complex ecommerce operations of the world's largest online retailer.

The $100-billion Indian software and services sector has been coping with slower rates of growth but it is still hiring in large numbers. In the year to March alone, the top five IT services companies are expected to hire more than 1 lakh professionals. The sector employs about 3 million.

Almost all of the world's foremost technology companies have operations in India and have pressed ahead with their plans regardless of the widespread perception that the country is losing its sheen as an investment destination.

"We are hiring in Bangalore, Hyderabad and Chennai, and will continue to grow our business in India," Amazon said in a statement.

Amazon has committed to take on lease 1 lakh sq ft in Hyderabad's HITEC city, adding to 3 lakh sq ft it leased last year in Bangalore's World Trade Centre. For Facebook, which set up its first India office in Hyderabad in 2010, the expansion is expected to help add to its development force to cater to the fast-growing local market. Facebook, which boasts over 900 million users globally, declined to comment.

The social networking company has leased over 40,000 sq ft in Hyderabad's Raheja Mindspace IT Park over the past three months.
Typically, builders charge Rs 30-80 per sq ft in large IT parks. Amazon could be paying over Rs 2 crore as rent every month and Facebook nearly Rs 12 lakh.

"There are signs of slowdown in the market, but companies such as Amazon and Facebook are willing to invest in real estate for both expansion and consolidation. Most multinational firms are expanding and investing in cities such as Hyderabad and Bangalore where talent pool is high," said Ram Chandnani, deputy managing director at the Indian arm of CB Richard Ellis, the world's largest commercial real estate broker.
Chipmaker Advanced Micro Devices, which recently tied up with distribution firm TAG as part of its India expansion plan, has leased close to 1.2 lakh sq ft in Hyderabad.

Xerox, known for its printers and copiers, too is looking to lease some 2.5 lakh sq ft in Bangalore for its IT services arm ACS, and discussing how and where to set up the new centre.

Amazon CEO- supporting rights with money

Amazon CEO Gives $2.5M for Wash. Gay Marriage Law - ABC News: "Amazon.com founder and CEO Jeff Bezos and his wife, MacKenzie, announced Friday they are donating $2.5 million to the campaign to defend Washington's same-sex marriage law.

With the gift, Washington United for Marriage has raised more than $5 million for its referendum campaign.

"It's a game changer for us," said campaign manager Zach Silk in Seattle. "It puts us in unique position to win."

But, his group is still the underdog, he said. In 32 previous elections nationally, same-sex advocates have lost. Silk said he believes the Washington election may be the turning point, thanks in part to the Bezos' donation.

"We're at a tipping point, and they really understand this is an historic moment, and they want to be on the right side of history and want to make history," he said.

Amazon publicly supported the law earlier this year, along with other prominent Pacific Northwest businesses, including Microsoft, Starbucks Corp. and Nike Inc.

Last month, Microsoft Corp. CEO Steve Ballmer and co-founder Bill Gates each donated $100,000 to support the law"

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Thursday, July 26, 2012

A fantastic business- government pays 75% of lost revenues, while all upside is for keeps (minus taxes).

Farmers May Gain Amid Drought With U.S.-Backed Insurance - Businessweek: "In 2011, with a drought in Texas and other weather woes, government-run crop-insurance programs paid out a record $10.8 billion. Of premiums paid in 2011, farmers chipped in $4.5 billion, while the government paid $7.4 billion, according to data published by the department.

Because of the program’s reinsurance rules, insurers made a $1.7 billion profit even with those record payouts, while the government took an underwriting loss of about $500 million, Pat Engel, a spokeswoman for the USDA Risk Management Agency, said in an e-mail.

‘Never Whole’
Jeff Scates, who farms corn and soybeans on 15,000 acres in Shawneetown, Illinois, said this year demonstrates the need for an effective insurance program. He said he may lose as much as 80 percent of his crop because of the dry conditions. With insurance, he said he can recoup 75 percent of his potentially lost revenues."

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Farming- a no-lose proposition

Farmers May Gain Amid Drought With U.S.-Backed Insurance - Businessweek: "This year’s once-in-a-generation drought may leave many crop farmers largely unscathed as they are protected by taxpayer-subsidized insurance, a program Congress is moving to make more generous.

With prices for corn, soy and wheat escalating along with estimates of the drought’s severity, government-backed revenue- insurance policies offered through units of companies such as ACE Ltd. (ACE) (ACE) and Wells Fargo & Co. (WFC) (WFC) probably will be paying out billions of dollars in claims. And the program is designed so that the larger the losses for insurers, the greater the share of the payouts the government will pick up.

Farmers “are laughing all the way to the bank,” Bruce Babcock, an Iowa State University economist and critic of the insurance program, said at a presentation in Washington July 19. “If the price goes up, you could end up better off than anticipated if you have a crop loss.”

“I’m not saying this is anything illegal, or immoral,” he added. “It’s just the way it is.”"

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An accurate portrayal of Republican politics

Republican Extremism and Intransigence: Not Newsworthy - Bloomberg: "The indictment continues in rat-a-tat style, fingering Republicans for:
The single-minded focus on scoring political points over solving problems.
Sharply asymmetric polarization, with an insurgent Republican Party far from the mainstream of American politics.
The widespread denial of an elected president's legitimacy.
An unbending opposition-party strategy of obstructing, demonizing, and nullifying presidential initiatives, accomplishments and appointments during economic crisis.
The hostage taking of the full faith and credit of the United States.
Nonnegotiable demands producing gridlock on issues of prime importance, including economic recovery and deficits and debt."

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Airline Chiefs- flying high on misinformation, grounded on character and competence

Airline bid to block consumer protections rejected | cleveland.com: "WASHINGTON -- The government can require airlines to show consumers a total ticket price that includes taxes and fees in print and online ads, the U.S. Court of Appeals said Tuesday, rejecting an industry challenge to a series of consumer protection regulations.
The Department of Transportation, which issued the regulations last year, has the authority to regulate "unfair and deceptive" airline industry practices, the three-member panel said in its ruling.
The ruling also covers two other regulations: A requirement that airlines allow consumers who purchase tickets more than a week in advance the option of canceling their reservations without penalty within 24 hours after purchase, and a ban on airlines increasing the price of tickets or baggage fees after tickets have been bought."


The rules had been challenged by Spirit and Southwest airlines, with the support of two major airline industry trade associations.
Prior to the new regulations, airlines could advertise a base airfare and separately disclose taxes and fees, which consumers would have to add together to arrive at a total price. Under the new regulations, airlines can still breakdown the price of a ticket to show taxes and fees, but the total price must be displayed in the largest type size and be the most prominent price in the ad or on the web page.
The airlines argued that there was nothing deceptive about listing taxes separately, which they said is the general norm in the U.S. economy.
But Judge David Tatel, who was appointed by President Bill Clinton, wrote in the decision that there's nothing in the regulations that would force airlines to hide the taxes. As an example, he pointed to Spirit's website, where taxes are clearly displayed under the heading: "The government's cut."
Judge Raymond Randolph agreed the transportation department has the authority to require the ads display a total ticket price, but wrote in a dissent that he disagreed with the portion of the regulation that requires a larger typeface be used for the total price than for taxes and fees. He said the regulation restricts the airlines' political speech. Randolph and the third judge on the panel, Karen Henderson, were appointed by President George H.W. Bush.
Officials for Southwest and Spirit said the two airlines are already complying with the regulations.
"While we're disappointed in the court's decision, it really doesn't further impact us," said Brad Hawkins, a Southwest spokesman.
Misty Pinion, a Spirit spokeswoman, warned: "American consumers are going to pay more for air travel and have less choice, as the (transportation department) continues to pile costly new rules onto an already over-regulated and over-taxed industry."
Jean Medina of the trade association Airlines for America said: "We continue to believe that this rule enables the government to effectively hide the ball regarding how high airfare taxes are."
Kevin Mitchell, chairman of the Business Travelers Coalition, which represents corporate travel managers, said the decision is "really good news for consumers" since it reaffirms the Transportation Department's authority to regulate the airline industry.
"Were it not for the Transportation Department, (airline) consumers would have no protections whatsoever -- it would be consumer protection no man's land," Mitchell said.
Under President Barack Obama the department has issued a series of consumer regulations aimed at protecting airline passengers, including placing a three-hour limit on the length of time airlines can keep passengers waiting on airport tarmacs before giving them the option of leaving the plane. Another wave of regulations, scheduled for November, is expected to address whether airlines should be required to provide the global distribution systems used by travel agents with all their ticket price and fee information.
Consumers haven't been able to effectively comparison shop airline ticket prices since 2008, when airlines began charging fees for a wide range of services previously included ticket prices, Mitchell said.

TARP banks, the Fed, and the Treasury: Modern Shell Game

TARP banks use fed loans to repay government - Business - US business - NBCNews.com: "Hundreds of bailed-out banks are still struggling to repay taxpayers and will soon find it even harder to make required dividend payments to the Treasury, according to a report published on Wednesday by the watchdog for the government bailout program.
Of the 707 banks that received taxpayer money from the government's Troubled Asset Relief Program starting in 2008, also known as TARP, about half have repaid the Treasury.
However, 137 of those banks used a government-loan program to repay their taxpayer debts, according to the quarterly report to Congress of the Office of the Special Inspector General for TARP.
Of the 325 banks still propped up with taxpayer money, 203 have missed dividend or interest payments, with some missing as many as 13 payments since receiving capital injections at the height of the financial crisis, the report said.
Adding to their woes, the dividend that the bailed-out banks are required to pay to Treasury is set to increase to 9 percent from the current 5 percent as early as 2013."

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Monday, July 23, 2012

Aamir Khan- focusing on tough problems

The Hindu : Opinion / Columns : The Aamir Khan Column: Thirst in the land of malhaar: "India is considered a water adequate country. But every year, large parts of the country, including those that receive abundant rainfall, experience severe water scarcity. According to some estimates, a woman living in rural India, on an average, walks 1,400 km every year in order to access water. Even in urban areas, supply of municipal water for as little as a few minutes in a day is common."

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Bank failures - the "Capital" saga continues...

Bank failures in 4 states bring 2012 total to 38 - Sunday, July 22, 2012 | 3:28 a.m. - Las Vegas Sun: "Regulators closed two small banks in Georgia on Friday and one each in Florida, Kansas and Illinois, bringing to 38 the number of U.S. bank failures this year.

That's a slower pace than in 2011; 58 banks had failed by this time last year.

The Federal Deposit Insurance Corp. seized Georgia Trust Bank, based in Buford, Ga., with $119.8 million in assets and $117.4 million in deposits; First Cherokee State Bank, based in Woodstock, Ga., with $222.7 million in assets and $193.3 million in deposits; and Royal Palm Bank of Florida, based in Naples, Fla., with $87 million in assets and $85.1 million in deposits."

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The art of respecting people but not tolerating slipshod performance

Your mean boss could be insecure - The Washington Post: "And this negativity seems to be taking a growing toll on workers. Recent Gallup research shows that 17 percent of people who quit their jobs leave because they can’t stand management or the work environment. In a 2009 survey, 35 percent of executives said that good employees are most likely to quit because of unhappiness with management — up from 23 percent in 2004. Another recent study found that between 28 and 36 percent of U.S. workers report persistent abuse at work. And Amgen CEO Kevin Sharer has said the effects are so destructive that “anyone with a bullying tendency, we fire.”"

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India and corruption: Public complaints, but even the educated engage in it with gusto

The Hindu : Cities / Chennai : Brokers make a killing with B.E. seats: "It is easy to assume that Dhanbor Bora belongs to the city, because he claims to know ‘how everything works here’ and speaks in relatively understandable Tamil. An Assamese businessman who is also into real estate back in Guwahati, he spends June, July and August in Chennai and calls himself an ‘admission consultant’. He has printed flyers that read: “Want to study medicine or engineering? The best colleges are waiting for you. Limited seats only.”

Bora plays broker to aspirants from eastern India who come to the State for higher education. He takes care of the whole of the eastern region, he claims.

“The craze for engineering has only begun there. Parents from Assam are usually desperate to secure a seat for their ward and pay without a question,” says the ‘admission consultant’ who started out as a seat broker four years ago.

Ashish and Rajeev Singh, brothers who run Singh Consultants in T. Nagar, are luckier, because they operate from Lucknow that has more engineering aspirants, and ‘fix admissions’ here. “We started with Karnataka but slowly moved to Chennai. There is more scope here as more people want to come here,” says Ashish Singh.
The brokers exploit various advertising media to canvas outside counselling and entrance test venues.
And then begins the negotiations. “Parents or students call us and we make a deal,” says Bora. The preferred destinations are the same every year. For engineering, it is Tamil Nadu (Chennai and Coimbatore), Karnataka (Bangalore, Tumkur and Manipal), Maharashtra (Nagpur and Pune), Orissa, and Sikkim (Sikkim Manipal University). The capitation fee varies depending on the State, cut-off marks, and the broker too.
Students from the south pay the least, followed by those from U.P., Bihar and Jharkhand. Aspirants from the north-eastern States cough up the maximum amount, they say.
So do these students and parents get to meet the college principal as part of the deal? “The principal is in no way related to this. We know some people in the administration and are able to arrange admissions,” says a broker in the city.
Though they claim to charge Rs. 15,000 per seat as brokerage fee, students say it is much more than that, and sometimes crosses Rs. 1 lakh when the season peaks.
“It used to be profitable in the past when there were fewer engineering colleges across the States. Now, a lot of us have shifted to medical colleges, because there is more commission to make, as the seats fetch anything between Rs. 40 lakh and Rs. 64 lakh each,” says Bora.
This year, business was pretty good, say brokers. “The last seats went for Rs. 5 lakh last year. This year, it has started on that note,” says a broker, who handles admissions, exclusively to deemed universities.
There are specialised brokers too. S.B. Murthy, a consultant in Nungambakkam, arranges admissions only for courses in catering. “The demand is less, but there is no competition at all.” He also spends a week on marine engineering admissions.
An SRM University official said complaints had been received from a few parents last year on how they were cheated by some students of the university posing as brokers.
“We caution parents and students against falling for such practices,” he said. To avoid such parallel admission procedures, Hindustan University has made it compulsory for parents and students to be present during all admission procedures.
“The brokers make you wait for many days and then claim that the seats have been filled. We have little choice as there aren’t many seats back home. At least, here, the admission is guaranteed,” says a parent from Bihar, who admitted his son to a deemed university, last year, after paying a donation of Rs. 9 Lakh.
“The broker said the college had a 300 per cent placement record, that is, every student gets three job offers. What more do I want?”

Unlimited vacations: an illusion, or a gap between theory and practice

Latest work perk: unlimited vacations - Life Inc.: "Welcome to the world of unlimited vacation days. Coupa is one of a handful of companies, including TheLadders and Netflix, that have decided to offer the perk to employees.
“This is an unusual benefit and not in the mainstream yet, but more companies seem to be looking at this as an option,” said Steven Miranda, managing director for the Center for Advanced Human Resource Studies at Cornell University ILR School.
"It's not a gimmick," said workplace change management consultant Matthew Stegmeier.
“Organizations that have had success with unlimited vacation, such as Netflix and Red Frog Events, rely strongly on accountability,” he said. “Employees must make sure all their responsibilities are covered prior to leaving, which often means counting on a colleague to pick up the slack. As such, excessive vacation usage will be frowned upon as it grates on colleagues.”"

Sunday, July 22, 2012

Planting a great sink for pollution

Plants reduce city street pollution 8 times more than thought: Study - The Economic Times:
...
Thomas Pugh and colleagues explain that concentrations of nitrogen dioxide (NO2) and microscopic particulate matter (PM) - both of which can be harmful to human health - exceed safe levels on the streets of many cities.

Past research suggested that trees and other green plants could improve urban air quality by removing those pollutants from the air.

However, the improvement seemed to be small, a reduction of less than 5 percent.

The new study sought a better understanding of the effects of green plants in the sometimes stagnant air of city streets, which the authors term "urban street canyons.

However, the improvement seemed to be small, a reduction of less than 5 percent.
The new study sought a better understanding of the effects of green plants in the sometimes stagnant air of city streets, which the authors term "urban street canyons."
The study concluded that judicious placement of grass, climbing ivy and other plants in urban canyons can reduce the concentration at street level of NO2 by as much as 40 percent and PM by 60 percent, much more than previously believed.
The authors even suggest building plant-covered "green billboards" in these urban canyons to increase the amount of foliage. Trees were also shown to be effective, but only if care is taken to avoid trapping pollutants beneath their crowns.
The study appears in the ACS journal Environmental Science and Technology.

Saturday, July 21, 2012

Arctic and Oil: A Shell game

Arctic wilderness faces pollution threats as oil and gas giants target its riches | World news | The Observer: "It is home to a quarter of the planet's oil and natural gas reserves, yet humans have hardly touched these resources in the far north. But in a few days that could change dramatically if Shell receives approval to drill for oil in the Arctic.

The company has invested $4bn to set up exploratory wells in the Chukchi Sea, north of the Bering Straits. Once permission is given by the US Bureau of Safety and Environmental Enforcement, - possibly in a few weeks - exploration will begin using wells in Arctic waters."

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Bloomberg- sounding reason on guns

Mass shooting prompts Bloomberg to call on Obama, Romney to address gun control - Political Hotsheet - CBS News: ""Maybe it's time that the two people who want to be president of the United States stand up and tell us what they are going to do about it, because this is obviously a problem across the country." Bloomberg said in an interview on WOR News Talk Radio 710 in New York City.

"I mean, there are so many murders with guns every day, it's just got to stop," he continued. "And instead of the two people - President Obama and Governor Romney - talking in broad things about they want to make the world a better place, okay, tell us how. And this is a real problem. No matter where you stand on the Second Amendment, no matter where you stand on guns, we have a right to hear from both of them concretely, not just in generalities - specifically what are they going to do about guns?""

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Apple crushed by U.K. judge

Samsung Judge to Apple: Admit You Were Wrong - Yahoo! Finance: "A U.K. court wants to make it clear that Samsung did not infringe on Apple's iPad design so they're forcing the iPad maker to issue a public notice saying they were wrong, according to a report.
In a move to counteract any damage done to Samsung's reputation because of the trial, Apple (AAPL) will have to issue a statement on its website and in British Newspapers reiterating the court's ruling that Samsung did not copy Apple's tablet.
[More From CNBC: The 10 Best and Worst Apple Products of All Time]
The notice on Apple's website will need to remain present for six months, according to a report by Bloomberg.
Earlier this month, Judge Colin Birss, who ordered Apple to issue the notice, ruled that Samsung's Galaxy Tablets don't violate Apple's patented designs."

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Thursday, July 19, 2012

Ruining the health of more people

On the Call: Philip Morris Int'l CFO Waldemer - CNBC: "Supply disruptions for rivals following the earthquake and tsunami in Japan in March 2011 allowed Philip Morris International Inc. to extend its reach in Asia.

About a year after Philip Morris bought Fortune Tobacco Co. in the Philippines, the disaster struck and disrupted operations at Japan Tobacco Inc.

Philip Morris produces its cigarettes outside of Japan and shipments to ports went on unabated. Smokers, unable to get their usual brand, switched to Marlboro and other Philip Morris brands.

In the second quarter this year, Philip Morris saw cigarette shipments in Asia fall less than 1 percent to 83.5 billion cigarettes. In Japan, shipment volume fell nearly 20 percent, but was up by about the same rate excluding the additional volume in the year-ago period."

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Friday, July 13, 2012

CEO: I am the hero, externalities are the villains

P&G to Philip Morris Blame Currency for Forecast Cuts - Bloomberg: "‘Woe Is Us’
“From the perspective of the CEO, good news is their own doing and bad news is an externality,” said Sonnenfeld. “It’s Europe and currency. It’s Obamacare. It’s all this horrible uncertainty. Woe is us. The problem is, you often have competitors in the same industry and they aren’t all suffering the same injury.”
P&G rival Kimberly-Clark Corp. (KMB) reaffirmed a full-year forecast for adjusted earnings of $5 to $5.15 a share on April 20. Analysts estimate sales and earnings rose in the second quarter. The company generated about half of its revenue outside North America last year, compared with 59 percent for P&G."

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Wednesday, July 11, 2012

Societal cost of unwanted children- a sad example

No charges for mother who abandoned severely disabled daughter at bar - U.S. News: "Police then contacted Eva Cameron, who returned to Caryville on Tuesday to acknowledge abandoning her daughter.
"The mother comes here yesterday and says, 'I don't want her. Do what you want to with her,'" Jones said. "She told my assistant that if the state of Tennessee doesn't want her, she'll be Kentucky's problem."
A hearing held on Tuesday in Campbell County determined no criminal charges were applicable in the case due to the fact that Lynn, despite having a much younger mental capacity, is an adult at 19, and therefore her mother no longer technically has legal guardianship over her. Lynn was handed over to the state of Tennessee; Eva drove back home to Illinois, where she has other children."

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Pepsi management- OK for us to sin, but not our employees

Pepsi Levies a Sin Tax on Its Workers - Businessweek: "Four years ago, PepsiCo (PEP) began rolling out a wellness program that charges its employees $50 a month if they smoke or have obesity-related medical problems such as diabetes, hypertension, and high blood pressure. Workers can avoid the surcharge if they attend classes to learn how to break their nicotine addictions or lose weight. When about 400 unionized PepsiCo bottlers and truck drivers in central New York learned early last year they’d be subject to the fee, they rebelled. It’s a “sin tax,” says Ozzie Martucci, secretary-treasurer of Teamsters Local 669 in Albany. “We’re against that type of tax, frankly. It feels wrong.”"



The workers decided they wanted to withdraw as a group from Pepsi’s health plan, so Martucci began shopping for a new one. A dozen insurers were interested in the Teamsters’ business, but they wouldn’t provide quotes without seeing a history of employee health claims to get a sense of the costs they could expect. Martucci says Pepsi-Co failed to turn over everything the Teamsters requested, citing health-care privacy laws. “We have always been willing to provide the unions with as much information as possible,” says Dave DeCecco, a PepsiCo spokesman. Martucci filed a complaint with the National Labor Relations Board last fall alleging that the company violated its contract with the Teamsters. A spokesman for the NLRB says it’s trying to negotiate a settlement.
PepsiCo opposes so-called sin taxes when it comes to levying them on its own products—an idea Congress floated in 2009 as a way to pay for health-care reform. Thirty states introduced legislation for soda taxes meant to improve residents’ health and close budget gaps. PepsiCo spent at least $17 million on lobbying and advertising to battle the proposals from 2009 to 2011, according to the Center for Science in the Public Interest, a Washington advocacy group. In the end, none of the taxes passed. “Most rational people understand that one product is not the cause of obesity,” says DeCecco. “It’s caused by a multitude of factors.”
The soda maker doesn’t think of its $50 assessment as a sin tax. Says DeCecco: “What company wouldn’t want a healthy, engaged workforce?”
The bottom line: PepsiCo has spent at least $17 million fighting soda taxes while assessing fees on its own employees who are overweight.

Tuesday, July 10, 2012

Being Benched, IT style

IT industry hit by shortage of projects from Europe and US - The Economic Times: "Top Indian information technology companies will add to their already bloated bench strength in the coming quarters, as the $100-billion domestic industry battles a slowdown in projects from the West, its biggest revenue generator, and employees are left without work.

According to industry watchers, shortage of projects from Europe and the US has forced software engineers to sit without projects for more than six months now, and utilisation rates could dip further with new campus recruits joining the workforce from this month.

"Barring a few quarters, projects have slowed down considerably in the last few years. While earlier clients would be ready to pay for the number of employees required plus for 20 per cent more, now they are not, leading to an inflated bench," said Amitabh Das, chief executive of Vati Consulting, a recruitment firm. There is uncertainty in the market and it could lead to retrenchment, Das added.
"

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An excellent article on growth economics

The Hindu : Opinion / Lead : The growth model has come undone: "Unsustainable import competition and the end of the investment subsidy that the sale of under-priced resources provided to Indian companies are the main reasons why the economy has slowed down

What has been called the ‘golden age’ of India’s economic growth was underpinned by global integration, high rates of investment and savings growth and low current account deficits. The slowdown is characterised by a sharp deceleration in investment growth on the demand side and in agriculture, manufacturing and construction on the supply side, alongside high and unprecedented current account deficits.

The government’s argument that this is the result of the global economic slowdown and related uncertainty is only partly true. The deeper reason, which the government is either unwilling or unable to come to grips with, is the unravelling of the underlying growth model — partly due to structural change engendered by globalisation and partly because the investment subsidy implicit in under-pricing assets is no longer feasible."

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Cheating one's way to Street Success

Many on Wall Street think cheating breeds success - Market Day: "Nearly one-fourth of financial services professionals feel it’s at least sometimes necessary to do illegal or unethical things to be successful, and many are motivated to do so by fat bonuses and other compensation.
That’s according to a new survey of 500 U.S. and British fund managers, bankers, asset managers and other financial services professionals. It was conducted in June on behalf of the law firm Labaton Sucharow, which specializes in whistleblower cases.
Twenty-four percent of respondents said if you work in financial services you must at times engage in unethical or illegal activity to be successful."

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Monday, July 09, 2012

Battle of the Yogurtinnovations

Pepsico shifts aim from archrival Brace for yoghurt war: Pepsi shifts aim from cola, takes on Dannon & Chobani - The Economic Times: "Are the cola wars at an end?

Brace for the yogurt wars, as PepsiCo, long focused on battling its archrival, Coca-Cola, takes on the likes of Dannon and General Mills, not to mention Fage and Chobani.

In the most visible sign yet of its efforts to curb its reliance on soda sales, PepsiCo this month will start selling yogurt in the Northeast and mid-Atlantic states.

The products will initially be manufactured in Europe by Theo Muller, a large privately held German dairy company that has formed a joint venture with PepsiCo to capitalize on the growing yogurt market in the United States. "


"We're very excited about this," said Sam Lteif, chief executive of Muller Quaker Dairy, the joint venture. "There's a huge opportunity for dairy in the US market, and we're optimistic about getting into it."

So confident are the two companies that they are investing $206 million in a 363,000-square-foot plant in Batavia, N.Y., announced in February, that will employ some 180 people and churn out 5 billion cups of yogurt a year.

PepsiCo, under its chief executive, Indra K. Nooyi, has been working to decrease its reliance on sugary carbonated beverages and snacks by developing new products and retooling old ones to increase their nutritional quality while remaining true to the company's more playful roots.

Nooyi calls this the "fun for you, better for you, good for you" strategy, and it has led to innovations that have reduced sodium in Lays potato chips and other snack chips and new sweeteners to reduce calories in juice products like Trop 50 and sodas like Pepsi Next.

The goal with Muller by Quaker is to add fun to yogurt, which Americans have regarded as a dutiful but not delicious snack. "It's been an 'I gotta have it because it's good for me' kind of a product," said Dr. Mehmood Khan, who oversees PepsiCo's global research and development. "The 'wanna have it' was missing."

Or as Stefan Muller, the great-grandson of Muller's founder, said: "Here in America, yogurt is so boring."

He noted that Americans on average consumed 12 pounds of yogurt a year, or half as much as Canadians and a third the amount of Europeans. "We look at the products and it's no wonder it's so low," he said.

Muller by Quaker will try to change that with what Lteif calls "mainstream premium" products that fill a gap between mass brands like Dannon and Yoplait and niche Greek yogurts like Fage and Chobani.

Sales of yogurt have been strong in Kroger stores across the country for the last several years, said Alan Faust, director of dairy perishable and frozen foods at the Kroger Co. "It has a healthier image and is tied to a healthier lifestyle," Faust said. "Some Greek is even being used as a meal replacement."

He has tasted the new Muller by Quaker products and says they represent an entirely new variety of yogurt, falling somewhere between Greek and conventional yogurts. "It's a really high quality, flavorful product with good body texture," he said.

Two varieties of the Muller by Quaker yogurts, one conventional and one Greek, come in square rather than traditional round packages with one corner filled with an ingredient that the consumer can add to the yogurt by folding the corner or using a spoon. Besides traditional fruit flavors like strawberry and blueberry, these supplements include caramelized almonds, tiny chocolate-covered crunch balls and granola.

The third variety is called Fruit Up because the fruit comes in a mousse that sits on top of the yogurt for the consumer to stir in. That allows the consumer to smell the peaches or raspberries as soon as the foil cover is removed.


Muller by Quaker also seeks to address one of the biggest consumer complaints about yogurt: its texture. Consumers find Greek yogurts dry and chalky, while conventional yogurt is seen as watery and tasteless.

"You have five senses, and we're aiming to hit at least four of them with these products," Lteif said.

Yogurt is one of the hottest categories of the food market, stoked by the success of Greek yogurts, which are thicker and higher in protein. Yogurt sales in the US this year will add up to roughly $7 billion, according to the consumer research firm Mintel, an increase of 9 percent over last year - when sales increased by 7.5 percent.

"In the food business, growth of 1 to 2 percent is considered very good, particularly for a mature product like yogurt," said John Frank, category manager for consumer packaged goods reports at Mintel. "This kind of growth is remarkable."

In the US, Dannon and Yoplait, in which General Mills has a 51 percent stake, are by far the dominant players. Dannon has 25.5 percent of the sales in supermarkets, drugstores and mass merchandise stores other than Wal-Mart, and Yoplait is at 26.2 percent, according to the SymphonyIRI Group, a market research firm.

But the inroads of brands like Fage and Chobani in driving new sales of yogurt gave PepsiCo confidence that there was room for another brand.

One of the biggest challenges for companies trying to break into the yogurt market is getting shelf space in the dairy cases of grocery stores. PepsiCo, with its vaunted distribution system, already sells its Tropicana juices there and has additional clout with retailers through its Frito-Lay and beverage businesses.

Analysts have long said that PepsiCo failed to exploit the Quaker brand, which it acquired in 2000 as part of its shift to more nutritional foods.

"Pepsi has so far mostly refocused unhealthy products to become healthy as opposed to leveraging and expanding the Quaker brand," said Ali Dibadj, a beverage analyst at Sanford Bernstein. "They've missed an opportunity with Quaker in nuts and other healthy products."

Khan's research team has been working largely out of Quaker's old headquarters in Chicago, and its innovations are just beginning to arrive in the market. Many of them are built around dairy, which is becoming a larger piece of PepsiCo's business.


In 2009, it created a joint venture with Almarai, a big Saudi Arabian dairy company, and last year, it completed its purchase of Wimm-Bill-Dann, a large Russian dairy company. The Russian acquisition increased sales of its healthier portfolio of products to about $13 billion annually, and PepsiCo expects that wedge of its pie to grow to $30 billion, driven largely by yogurt and dairy, by 2020.

Last year, for example, a protein the team extracted from milk was added to Gatorade Recovery, which perhaps explains Coca-Cola's recent agreement to distribute a small dairy-based sports drink, Core Power, which is owned by a dairy cooperative.

Quaker this year introduced Real Medleys, a line of instant multigrain oatmeal with added fruits and nuts that can be eaten right out of the container, and Khan said the company could not meet demand for the product.

Such changes have led at least one Wall Street analyst to voice what had been regarded as heresy and spoken only in whispers. "The cola wars have abated," said John Faucher, the beverage analyst at JPMorgan Chase. "Pepsi is now focused on growing all the beverages it sells - teas, juices, Gatorade - and not just selling more carbonated soda than Coke at the expense of profit margins."

Let the yogurt wars begin.