Gray Smoke

  The grand chessboard of global power has transformed dramatically in the 21st century. Where nations once measured strength through nuclear arsenals and ideological allegiance, today's geopolitical contest revolves around economic systems, supply chains, and financial infrastructure. This represents not merely a tactical shift but a fundamental redefinition of power projection on the world stage.     The Dollar Kingdom and Its Crumbling Walls   At the center of the post-war economic order stands the U.S. dollar—the world's primary reserve currency and the cornerstone of global trade. Yet this dominance contains within it a fundamental contradiction known as the Triffin dilemma . To supply the world with sufficient dollars for trade, America must maintain persistent deficits, effectively exporting currency instead of goods. This creates an impossible balancing act: simultaneously maintaining a strong dollar as a stable reserve asset while running deficits t...

  While media outlets have been extensively criticizing India's apparent lack of response to the Trump administration's new tariffs, I find the Modi government's measured approach refreshing. Rather than joining other world leaders in making immediate and potentially reactive public statements, India has chosen a path of careful deliberation. This restraint raises an interesting question: Are other global leaders genuinely interested in productive negotiations with the incoming Trump administration, or are their public pronouncements merely designed to bolster domestic and international popularity? A Strategic Economic Maneuver The Modi government has instead implemented a sophisticated economic response by increasing the excise duty on petrol and diesel by Rs 2 per liter. What makes this move particularly astute is that this additional tax burden will be absorbed by the oil companies rather than passed on to consumers. This timing is strategic for several reasons. Oil...

Disclaimer: 1. I own significant AMZ stocks in my portfolio. 2, While I work for Amazon, I do not posses or have access to any Amazon propitiate information or data 3. All information in this article was got from SEC reports and using Claude AI. Over the past week, Amazon’s stock (AMZ) has plummeted amid President Trump’s newly imposed tariffs, sending ripples of concern through my colleagues and friends at the company. Yet, I contend this sell-off is a fleeting overreaction, fueled by market sentiment rather than a sober assessment of Amazon’s fundamentals.       Admittedly, tariffs will likely drive up the prices of goods sold on Amazon’s retail platform. Critics argue this could erode demand, but I see a different outcome: higher prices may actually bolster Amazon’s revenues. Even if consumers shift toward cheaper items or buy less, total spending could rise—a dynamic supported by the company’s historical resilience.   Consider the data from Q1-2021 to Q4-2024: t...

On May 29th, our esteemed opposition leader attacked the govt and particularly PM Modi for the failed demonetization. [ India Today ] They were based on widely circulated report that the fake notes of 2000 and 500 had increase 50% and 100% respectively. Some of the headlines were eye catching ·        Cash you hold could be fake. ·        Banking Central | Counterfeit notes are back in full swing and that’s worrying ·        This denomination saw the highest increase in counterfeit notes in FY22 This could be bad news for the Indian economy and as I am interested in numbers, I decided to dig deeper.  One thing which struck me as I looked at other new reports was none of them reported about the magnitude of the problem. For example during demonetization in Nov 8 th 2016, the estimated amount of notes in circulation was Rs 15,44,000 Crs. [ PTI news ]. The top 5 pages of google...

An amazing article by Joe Nocera that demystify how VaR mislead everyone to take more risk. RISK Mismanagement - What Led to the Financial Meltdown - NYTimes.com I am a great fan of Nicholas Taleb. I am not an expert on Statistics or Modeling but I find it appalling how data can be misrepresented for vested interests. One of the most interesting aspects was that VaR gave a 99% risk prediction for the next day. 99% may sound reassuring but the remaining 1% percent failure means 3.5 days in a year. I first encountered 99% folly when I saw my Internet SLA had 99% up time. It means that 3.5 days in a year, I could not do business. The cost of calculating the confidence level or delivering the service is an exponential curve. 95% may cost $1 Million, 99% will cost $10 Million, 99.9% will cost $100 Million. As 95% is not reassuring, it makes sense to get 99% assurance by spending the marginal cost but not worth spending money to get 99.9% assurance. In 99% we do not build any backups and ...

Finally an amazing article by Joe Nocera that demystify how VaR mislead everyone to take more risk. RISK Mismanagement - What Led to the Financial Meltdown - NYTimes.com I am a great fan of Nicholas Taleb. I am not an expert on Statistics or Modeling but I find it appalling how data can be misrepresented for vested interests. One of the most interesting aspects was that VaR gave a 99% risk prediction for the next day. 99% may sound reassuring but the remaining 1% percent failure means 3.5 days in a year. I first encountered 99% folly when I saw my Internet SLA had 99% uptime. It means that 3.5 days in a year, I could not do business. The cost of calculating the confidence level or delivering the service is an exponential curve. 95% may cost $1 Million, 99% will cost $10 Million, 99.9% will cost $100 Million. As 95% is not reassuring, it makes sense to get 99% assurance by spending the marginal cost but not worth spending money to get 99.9% assurance. In 99% we do not build any back...

I was reading an article on NYT about cap on executive pay and in recent past I have been having similar discussion with my friends. I think the executive pays were becoming obscene and at times I do not find a logical reasoning to such high salaries other than will not find the right talent. I know of a lot of bright guys who work in government rather than private sector because they can make a larger difference. I know of bright folks who work with social sector rather than government/private sector because of the change they bring about to bottom of the pyramid. Similarly I think there will be a lot of right minds who will want to work in industries rather than financial services because the impact they make. After all it is the mercenaries who want to make money in short term, who have ruined the manufacturing base in US. Do you really want a person who is after short term money to run your company ? Why not hire a consultant for that period to just fix the specific issue ? The ...

As an Indian I was of the opinion that India should do a military strike. However as we have seen in case of Afghanistan and Iraq not even US is able to control these areas. India will only end up hurting itself, its soldiers and its economy The army's are equally balanced not to say about Nuclear weapons. In a short war, there will be equal losses and long war no one can afford with Nuclear weapons. Is there any logic fighting a mad dog with your bare hands ? Pakistan is fighting a low cost war by having Muslim fundamentalist. India is fighting back with expensive army in Kashmir. India cannot play the low cost game, it should force Pakistan to play the high stake game Solution: Economic war. 1. Army on Border: Make Indian Army on high alert on Border for next 2 years. Let Pakistan retaliate. What is a Billion Dollar a month from a Foreign reserve of $200B. Let Pakistan match this for a $7.5Billion loan from IMF 2. Unilateral Economic Tax Every business entity doing business in Pa...