Aug 23 2013
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Another summer gone by

Writing about the summer from airline lounges seems to have become a tradition. As I write this, I am sitting in the Austrian Lounge in Vienna. I thought I would do a sort of verbose montage of all that occurred during the this summer as I did everything. But laziness got the better of me and I am resorting to a summary like the one I did last summer. Although I interned at NVIDIA again, and stayed at the same place, this summer was certainly more eventful.

I had a different team at work this team – GPU Architecture – but the work was as enjoyable if not more than last year. But I won’t talk much about work. It is the other stuff that was much more fun. Poker/Top Gear nights, meeting amazing personalities, going to the CEO’s house again and getting around California in the two cars that define pop american muscle – the Mustang and the Camaro. Both convertible. I don’t know if it was just the fun I had over the summer, but I think the Bay Area seems like a good place to start right out of college. But I think it isn’t just the fun. NVIDIA is a great place to work, especially as an intern. You get a lot of freedom to explore, and talk to other people, in various teams, who have achieved so much about which they are ready to share. Yes, interns get a good amount of work, but it is rewarding work, stuff that really matters and not just a button or a feature on a huge app. They also don’t distract interns with what I call bling. Something that MS and Google do. Something very similar to the work ethic people have at CMU, which is why I think there are so many Tartans at NVIDIA.

Talking of CMU, there was a great alumni/student summer event. Great food, great people and great organization. But what really left me awestruck was the sheer number of CMU alums that have moved to the Bay Area, especially from ECE and CS. I think CMU must have the most alums in the area after Stanford.

Abrupt ending but it is time to board. More later.

Apr 08 2013
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Economics

Do High-End Brands Devalue Money?

I was thinking recently about the number of times I’ve heard, “it’s more expensive, so it must be better” and it is not a small number. But what implications do thinking like this have? According to me, the whole point of money is to value the utility of buying a certain good but it is not a two way implication. It can’t be a two way implication. If a more expensive good is considered to be better by consumers, that gives businesses incentive to gradually increase their price even if their good is not as valuable.

Let us consider clothes. What should decide the cost of, lets say, jeans? The cloth, the design, the labor, the shipping? However, the major proportion of the price is paid for the brand value or exclusivity. Suppose a high-end retailer sells a pair of jeans for about $450 and the cheapest jeans you can get on the market is $20. A consumer would perceive the $20 jeans to be of much inferior quality than the $450 jeans even if it may not be true. Most consumers would then go on to buy what they would perceive to be of acceptable quality, i.e. somewhere between $20 and $450. This gives incentive for the $20 jeans to either actually reduce quality and improve margins or increase price and improve margins. Both of which lead to the consumer getting less for their money than before. Either of these actions by the $20 jeans company makes the high-end companies increase prices for two reasons. First, to maintain the new quality per dollar metric set by the reduced quality of the $20 jeans, and second, to keep a price gap to maintain exclusivity if the $20 jeans get assigned a higher price.

The change in actual quality due to the consumers perceived quality causes a devaluation of money as consumers end up getting less in the future. This is still highly speculative though and I have not been able to find any notable work that addresses a similar problem of consumer perception and its effects on the market. Any thoughts on the topic would be welcome.

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Mar 24 2013
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Economics

The Mutual Fund Zonal Defense Problem

This semester at CMU, I have taken up a macroeconomics course called International Money and Finance, taught by Prof. Marvin Goodfriend. Despite this being the hardest course in economics I have ever had thus far, it also the only course which I have enjoyed and from which learnt the most. Prof. Goodfriend’s practical experience while he was at the Richmond Fed is the most compelling feature that allows him to shed light on the current economy in a very unique way.

Recently in class, while talking about the 2008 meltdown, he talked about the regulatory problems with money market mutual funds (MFs). In what is a very unique and illuminating parallelism, he said the issue was rather “like a zonal defense problem” in American football. To explain the parallelism, it seems appropriate for me to explain the entire problem first. Money market mutual funds allow retail investors to partake in a larger and more rewarding investment by buying ‘shares’ into the investment instrument. Since the investment is usually large, retail investors on their own would not be able to make such a fund on their own and they may not have the expertise to manage it. MFs are particularly attractive instruments when general interest rate of the market is low, since the MFs usually promise a higher rate of return than lets say bank rates. The higher interest rate is a manifestation of the regulatory issue in question.

Since MFs are formed by collecting funds through issuing commercial paper, they are in a sense depository. However, institutions can argue that they are not legally responsible to maintain the value of commercial paper, only to pay interest on it. In most cases though MFs are unofficially backed by the institution that raises the funds for reasons like maintaining a lower interest rate on commercial paper and a fee income for backing conduits of the commercial paper. So creditors are essentially guaranteed to not lose value of their money, just like depository institutions. But depository institutions are required to maintain reserves with the Fed along with other regulatory checks which brings down the interest rate on deposits and MFs are not, because legally speaking they are not guaranteeing ‘deposits’. MFs are instruments which can potentially lie within the jurisdiction of the SEC since the commercial paper is traded in the market. And this is the zonal problem since MFs run along the boundary of the Fed’s and the SEC’s jurisdiction.

The surprising thing is, MFs were one of the causes of the meltdown when people began to stop rolling over their commercial paper and there wasn’t enough liquidity in the market. Yet, the new Dodd-Frank regulations don’t quite address the MF issue and this is exactly due to the zonal defense problem.

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Mar 10 2013
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Momentary Inspiration

The last time I was on a plane and it was dusk outside:

The sky bled
Under the Sun’s red gaze
As I skid across the clouds
Like a pebble in a daze

What is my destiny I wonder
As I pass over this bloody sea
I wish I knew just as any other
Who wonders what he is to be

When such seas I must cross
I seek his sheltering hand
Like a child seeks his father’s words
So with unbowed shoulders I may stand

When all else around me withers
And my body screams for me to stop
I pray for his guiding light
To shield me from the sheer drop

But he rewards not hymns or prayer
Only effort and will can sway him
I wonder how many seas I can cross
Until I too become one with the dim

But just as evening gives way to night
Just before the day steals the dark away
I hope that this sea I cross
Will show him and make him say

That I have earned my peace
And nothing can steal it away

Aug 18 2012
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Bye-Bye Bay Area

As I sit in the United lounge at the San Francisco airport, I look down at magnificent airliners milling about in the ever present mist and I reminisce about the summer that was. I spent the summer in the bay area interning at the best GPU experience manufacturer till date, NVIDIA. I spent the summer in one of the best cities, San Francisco. But most importantly, I had a lot of fun while I worked hard.

The biggest highlights for me this summer is the great people I met over my time here, at work or otherwise. Working at NVIDIA I was in touch with the best minds in the business. I was especially humbled by the vision and wisdom of the CEO, Jen-Hsun Huang, who I had the opportunity of meeting and hearing more than once this summer; once at his beautiful house for a dinner party. Moreover, I was delighted at the opportunity to meet and pick the brains of Dan Vivoli, VP Marketing and Bill Dally, VP R&D.

Apart from meeting all these wonderful people, I am happy to have finally experienced the bay area. It won’t be long before ‘The Intern Experience’ is an oversubscribed bay area tourism package. And the reason is that there is not much that can be missed in the bay area. City life? Check. Nature walks? Got it. Stunning entrepreneurial culture? Yup. Top notch technology? Of course. That is something   very unique to this place and probably a reason for the kind of success seen here. attracts all sorts of people who do all sorts of things. And when these people work together, good things come out of it. In this short summer I spent here, I was able to shoot a pistol at a range for the first time in my life (quite an experience), go trekking on the most beautiful stretch of land rife with every imaginable color as the hills look upon the ocean, test drive some of the best four-seat convertibles in the market today, go see the best comedian of today (Aziz Ansari) and go meet a musical legend (Sean Kingston).

Although I wish I could have written about everything I did, I am left with many experiences difficult to bequeath unto words, and with the boarding call for my flight being announced on the PA I bid a bittersweet adieu to this summer. But now I have a new goal: to make the next time even better and even more memorable.

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Aug 14 2012
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Telephone Agony

Although it has been more than a couple of months since I started this blog, I have deliberated long since about writing one. I do like to write. I write books in my spare time about all sorts of things. But a blog is different. A post doesn’t have the liberty of length to develop into something truly marvelous. Only a few paragraphs must contain the coconut’s juice.

Anyway, the reason I wanted to write this blog was to elaborate on my experiences so that I am spared the agony of repeated and long telephone calls to everyone (particularly to my mother) who wants to know what happened today, yesterday and everyday. Besides, it gives me a medium to opine about anything and everything that is going on around me, from the exhilaration of driving at almost 200kmph to the flatulent boredom of waiting in line to pay for the speeding ticket.

Writing gives me great joy and even greater joy if I inspire you with it!