The people who followed a strict diet that Graham preached were known as Grahamites.

To meet the needs of the Grahamites, the Graham flour, which was coarsely ground whole wheat flour, was produced. The Graham Cracker was produced by Graham himself. A biscuit made with unsifted flour.

He did not produce or profit from the product. The demand from the thousands of Grahamites was so great that many biscuit companies, including the National Biscuit company started mass producing the product in 1898.

They have remained popular ever since.

Source: Wikipedia

The frame that was used to suspend the meat was translated by the Spaniards to barbacoa. The original Arawak term, barbicu, referred to the framework of wood, which was also used to store food above ground.

The word found its way from Spanish to Portuguese to French to English. It was first used in English in 1661 in Edmund Hickeringill’s Jamaica Viewed: “Some are slain, And their flesh forthwith Barbacu’d and eat”. It was initially used as a verb rather than a noun, and the noun usage evolved later in the century.

The word has also had several spellings, including barbeque, barbecque and barbecue over the years.

No.

Politicians are people who tend to be extroverted, have charisma, charm people, speak well, and are extremely confident. That already creates a filter for the sort of person you would find in the political office. The way in which electoral politics is framed, there are certain people who are already excluded from the possibility of office.

Further, it is not like people who have served in office once are excluded from being in office again. They can keep running for political offices over and over.

This creates a small group of people whom we refer to as politicians.

Democracy is a rule by the people. Dictionaries will sneakily insert “typically through elected representatives,” which is not a precondition to democracy.

In this book, the author makes the case that picking 500 random people to run the government is a far more representative and egalitarian means of selecting a government than through the electoral system that we have come to depend on. The electoral system only serves to exclude a large number of people from being able to rule or create rules that govern our societies.

This leads to the capture of the government by a small number of politicians. This is the rule of the few, more appropriately defined as an oligarchy. We, the people, are sent to elections at a fixed cadence to choose from the same set of candidates over and over.

These people can then be easily bought and owned by the elites in the system who fund their elections and drive all of the policy agenda.

If at all, any policies are passed that align with the needs of the larger masses, it is because the interests of the elites align with the masses and not because there is any interest in doing anything for the masses.

Historically, several societies, including Athens, picked people for political offices through lots. This system was slowly eroded away by the 17th century to give us the modern electoral representative system.

The problem is that having career politicians reduces the need for them to do anything for the larger populace. The current state of equity across the world is a result of having politicians who would serve the will of the monies interests alone.

End Times is a book in which he presents his research on Cliodynamics without the mathematical formulae. The book, Foundation, by Isaac Asimov, is based on the same theory.

Cliodynamics treats history as a science and uses mathematical modelling to predict cyclical patterns that repeat themselves over and over. This does not mean that the future is set and society is doomed; it just means that one can make meaningful predictions by looking at what has happened and what is currently happening.

The dumbed-down version is that there are always the elite class and the working class in society. There are instances in history where the elite class has allowed wealth to percolate into the working class and not tried to hoard all the wealth for themselves. The author describes this as the wealth pump.

As recently as the 1960s, the richest people in the USA paid 90% in taxes. This was normal, and it is also the last time there was equity in the US. Since the 1980s, the elites in the system have been hoarding up more and more of the wealth and pumping the wealth pump harder.

This has resulted in greater inequity.

Often, when the wealth pump is primed, it results in elite overproduction. There is a fixed number of industries/political offices that the elites can control. As the number of elites grows, there have to be losers who do not get to control anything.

As Amitabh Ghosh writes in The Nutmeg’s Curse, revolutions don’t start on the streets; they start in the courtyard of palaces.

The priming of the wealth pump produces extreme poverty, and there is a discontented populace waiting to explode. The presence of an elite who is willing to go against the system is the match that the powder keg requires.

Peter Turchin wrote in 2012 that the system would explode by 2020.

While it seems a bit like voodoo since the book does not plunge deep into the maths, it is nevertheless a very compelling read.

This was the Iron Age and getting through fortified castle walls was not easy. Medieval siege warfare was brutal and extremely human intensive. These were meat grinders where several men had to be lost to get through the fortifications.

One of the methods that was devised as a means of getting around the fortifications was to dig under the foundation of the walls to weaken the walls and make them easier to bring down. This practice of weakening the foundation came to be known as undermining.

This practice also gave rise to technique of fighting wars from covered trenches known as sapping. The divisions engaged in these operations came to be known as Sappers. The engineering regiment of the Indian army located off Ulsoor Lake, Bangalore is known as the Madras Sappers.

It was not until the 15th century that word started taking a metaphorical meaning which it is known for today.

I was quite curious about the LBO structure itself, which was the reason I picked up the book. In a leveraged buyout, the PE fund (buyer) buys shares of a company by making the company take out a huge loan.

If you have taken a class in accounting, you would know that

Assets = Debt + Shareholder Equity

and

Shareholder Equity = Share capital + Share premium + Retained Earnings

Retained Earnings = Revenue - Expenses - Dividends

Retained earnings are the part of the profit that the company has kept for reinvestment, or as reserves for black swan events.

The share capital + share premium reflects the share price, which is a proxy for the assets that the company has, including cash and property.

If you were to invest in a company, of course, you would like the company to have more assets than debt. Or in other words, you would like it if the company has a lot more equity than debt.

Typically, if you look at a publicly traded company, the debt to equity ratio would be in favour of the equity, say, 1:3. In other words, the debt that the company has is one-third of the equity. An LBO reverses this and makes the debt-to-equity ratio 3:1.

Toys R Us, for instance, took $ 5 billion in loans to fund its acquisition by PE funds. This came with a $400 million interest payout every year.

PE Funds like to project themselves as knights in shining armour who are helping dying businesses rejuvenate themselves. Most of these companies eventually are run into the ground, and the collateral damage is the employees. So, how does it make sense for the PE funds, and how does it make sense for the banks? Why do they even do this?

This is where I found the book really illuminating. The author follows 4 individuals and what happened to them before the PE fund took over, during the takeover and after it. The story is very common: a PE fund comes in, talks about efficiencies and productivity, and fires a lot of people. Makes one person do the job of 5 while reducing that person’s salary. Pays 1000 times that person’s salary to the CEO. Runs the business into the ground, or continues to amalgamate and make sure more such businesses roll into the holding company, reduces choice and gouges the customer while providing shitty service.

It makes sense because, the PE fund has itself raised most of its money from pension funds and the likes. The partners are on the hook for just 10%. Those very partners charge 2% per annum in management fee. That 2% is on the entire capital deployed. Say a PE fund is managing $1 billion, the partners kick in $100 million but charge management fee on $1 billion. They are netting $20 million each year even if they are doing a lousy job.

What caught my attention was the industries that were covered. Housing, Newspapers, Retail, and Hospitals.

The common thread is that almost all of the businesses are ones that started 30+ years ago. They are barely profitable or loss-making with an inability to make more investments. But most importantly, they all own land, sometimes in prime locations of the city, which have accumulated huge capital gains over the years.

The PE business in America is an elaborate scheme to transfer capital gains without incurring taxes.

No sooner have the PE funds moved in, their first order of business seems to be to sell the asset and lease it back to the business. The one thing that made the business operation financially efficient is removed. This is billed as a way of creating capital pools that can be reinvested in the business. The proceeds are rarely used to invest in the business; they go partly towards the debt and partly towards paying the management fees that the PE funds charge their target businesses for the disastrous job that they do.

They manage to project it as a service that they are doing for the retirees by making larger returns for them.

When the company eventually fails, the banks that lent money move in to sell whatever assets remain within the company to the next highest bidder and make good their investments.

PE Funds are just another way the boomers are screwing over their kids and their grandkids.

While several American billionaires and politicians were named in the files, Pan Bondi said, if we were to go after all the people who are named in the files, the entire system would collapse.

The reaction of the American people was ‘Meh’. Late-night hosts made fun of it. The women who came forward felt stupid. Life moved on.

Incidentally, Donald Trump was named 5300 times in the files and as someone usefully pointed out on Twitter, Harry Potter is named fewer times in all of the 7 books put together.

Across the Atlantic, there was far more enthusiasm to do something about the people named in the file. At one point, it even seemed like the British government would collapse not because the current Prime Minister, Kier Starmer, was named in the files, but because he had appointed Peter Mandelson as the Ambassador to the US, and his name figured prominently.

The former Norwegian PM Thorbjørn Jagland was rushed to the hospital since he attempted suicide because his name surfaced in the files and triggered corruption charges.

Thomas Pritzker, the Chairman of Hyatt Hotels, stepped down from his role.

Kathy Reummler, the Chief Legal Officer of Goldman Sachs, who had previously served as the White House Counsel during the Obama Administration, stepped down.

Peter Attia, the Logetivity influencer, had his CBS show cancelled.

Richard Axel, a Nobel laureate and Professor at Columbia University, said he would be stepping down from his position.

Larry Summers, the former president of Harvard University who served as treasury secretary during the Clinton administration and head of the National Economic Council in the Obama administration, said he would step away from teaching at Harvard.

The list is long, but the highlight is that Former Prince Andrew, brother of King Charles, was arrested in England.

The Harry Potter of this saga was beginning to feel the heat. Hence, the bombing began in Iran.

Israel and the US had bombed Iran in 2025. Iranians had launched missiles towards Qatar and then informed the US that retaliation was on the way. Damages were avoided, but so was contagion. Iran did not want an escalation, unlike Israel. Turned out, Iran was the country with greater statesmanship and forbearance.

Iran had strategically ensured that it had put its country right next to all the US bases, expecting a situation like this.

Source: Al Jazeera

Israel and the US were aware, if they attacked, all the countries around Iran with US bases would be attacked. With absolutely no concern for their bases but also for the people living in all of those smaller nations, an attack was launched with no clarity of purpose or an end goal. This has to be perhaps the dumbest CIA operation.

Without a legitimate replacement in the country, they assassinated the Ayatollah. A regime change is either effected by sending troops to decapitate the state completely, as they did in the case of Iraq or by supporting an actor who has the respect of the masses and the military, like they did in Bangladesh when Sheikh Hasina was ousted.

So now what?

The Epstein story is buried, and all of the attention has shifted to Iran.

With no clarity of purpose or goal, the bombing of Iran continues. The economies of the Gulf nations will suffer as this bombing endures. For one thing, three of the largest airlines in the region - Emirates, Etihad and Qatar Airways are not able to fly.

They have given a huge jet and invested heavily in Trump’s businesses. The pressure is going to be on Trump to end this soon.

The real question is, what is the exit ramp? After having engaged in this escapade, when they stop bombing, what will be justified as victory?

Semitic people or Semites is a term for an ethnic, cultural or racial group associated with people of the Middle East and the Horn of Africa, including Akkadians (Assyrians and Babylonians), Arabs, Arameans, Canaanites (Ammonites, Edomites, Israelites, Moabites, Phoenicians, and Philistines) and Habesha peoples

Source: Wikipedia

By this definition, anti-semitism seems to be a euphemism for Islamophobia. It is a twisted interpretation that implies anti-semitism is hatred of the Jews.

Since we are on the subject of hatred of the jews, the people who hate them the most are British. The current Jewish population in Britain is estimated at 0.5%. When Britain occupied Palestine during the Second World War, there was a restriction on the number of Jews who could migrate to Palestine. The British did not want anything to do with the jews. Probably why they started by trying to appease Hitler until the war came home. They created the state of Israel because they wanted to play no part in accommodating any jews after the war was over.

The European “semites” went on to occupy Palestine after the Second World War, and their demand for a Jewish state was a cornerstone of Zionism.

Theodor Herzl was the founder of the modern Zionist movement. In his 1896 pamphlet Der Judenstaat, he envisioned the founding of a future independent Jewish state during the 20th century.

Source: Wikipedia

It speaks volumes that even the document that envisioned the founding of Israel was not even written in a Semitic language. It was written in a language of the Zionists, a European language.

The first government of Israel was full of Europeans.

David Ben-Gurion - Born in Poland

Dov Yosef - Born in Canada

Zalman Shazar - Born in Belarus

Moshe Sharett - Born in Ukraine

Eliezer Kaplan - Born in Belarus

Haim-Moshe Shapira - Born in Belarus

Pinchas Rosen - Born in Germany

Gloda Meir - Born in Ukraine

Bechor-Shalom Sheetrit - Born in Tiberias

Yehuda Leib Maimon - Born in Moldova

David Remez - Born in Belarus

Yitzhak-Meir Levin - Born in Poland

There was a grand total of one person on the cabinet who was born in semitic land.

Paternal Country of Origin - Present-day Israel

Source: Wikipedia

Even today, two-thirds of the jews in Israel trace their origins to non-Semitic lands. Israel is a collection of a bunch of Eastern European people.

Given the genocide in Gaza. If at all, any country that can be deemed anti-semitic, it is Israel. The G7 are active participants in the anti-semitism perpetrated by Israel.

Referring to the people of Israel as Semitic is like saying ‘Trump is pro-European’, because all the white people in the US descend from Europeans.

As the idea of genes took root, so did the idea that some people had bad genes and some people good ones.

It was assumed that those who were prone to diseases such as epilepsy were perhaps suffering the results of having bad genes. The idea soon emerged that if such individuals were taken out of the gene pool, bluntly put, if such people could be sterilised, the future generations would be better off and would not have to suffer these faults. This gave birth to the field of eugenics.

Genes were also considered responsible for shortcomings and immoral behaviour. In the US, such people were considered feebleminded. Feebleminded people were also categorised into three categories. Stupid, Imbecile and Moron.

A Stupid was a person with a mental age of less than 35 months.

Imbeciles and Morons had a much more fluid definition. Essentially, people found to be engaging in indecency, prostitution, etc, which could not be harshly punished by the law, fell into this category.

In the US, in 1910, the idea of separating the feebleminded took root. A colony was created at Lynchburg, Virginia, where these feebleminded were taken to live. It was a Hotel California that you could check into, but you could not get out of.

The colony was authorised by a 1906 bill written by eugenicist and social welfare advocate Aubrey Strode, in collaboration with eugenicists Albert Priddy and Joseph DeJarnette. The colony received its first patients in 1911 and by the end of the calendar year had more than 150 men who suffered from epilepsy, a condition of social abhorrence. Colonies like the Virginia State Colony had been established in order to separate the disabled from criminal populations, for example, many of the first inhabitants of the Virginia State Colony had previously been housed in prisons and state hospitals. Originally, only men could be patients of the colony, but after roughly one year of operation, superintendent Priddy allowed women into the colony who were diagnosed as feeble-minded.

Source: Wikipedia

The institution underwent several rounds of rebranding but was finally shut down in 2020.

When Hitler was being released from prison after the Beer Hall Putsch, a lady by the name of Carrie Buck arrived at Lynchburg, and she was the subject of a court battle over the legality of the state go Virginia to sterilise her. The case went all the way to the Supreme Court, which decided that it was legal for the state of Virginia to sterilise Ms Buck.

While the sterilisation program at Lynchburg continued till 1956, the eugenicists involved there also marvelled at how efficiently Hitler was pushing the idea of the purity of the race. The idea of segregating and doing away with individuals with poor genetics appealed to many of them.

The concentration camps run by the Nazis were explicitly run with the idea of killing people with a particular gene. Or rather, killing all those who did not possess Aryan genetics.

Hence,

Geno ~ referring to a or belonging to a gene; and

-cide ~ denoting a person a substance that kills.

We got Genocide.

I was travelling to the US towards the end of January and did not want to post anything fresh that would result in my deportation. At the time, the hottest thing in the news was the ICE raids in Minneapolis.

The other piece I had written was about the most anti-semite nation in the world - Israel.

I chose to keep my mouth shut.

My choice was not irrational either. I knew an American citizen, who just happened to be brown, who was stopped at immigration and had their phones and laptops checked by the officials.

Censor is a word derived from the Latin word Cēnsēre, which means to appraise or to judge. But when that appraisal is done in the context of political acceptability, one is already on a slippery slope.

During the Nuremberg Trials, the reasoning offered by the Nazis for their actions was - it was the right thing to do at the time. Joseph Goebbels ran propaganda for Hitler the way he did because otherwise, he would have been fired.

It was the “politically acceptable” thing to do.

Pam Bondi is defending the people named in the Epstein files the way she does because otherwise, she might be fired.

Across the world, the state reserves the monopoly on violence. They inflict that violence through the police. The system that controls that violence determines behaviour. When that control slips into the hands of one all objectivity is lost. Polical acceptance becomes a proxy for self-preservation.

Not every German was a Nazi, every German did what was politically acceptable.

Doing the politically acceptable thing results in self-censorship. That kind of censorship enables the few at the top.

It got me thinking.

A few days later, my maid, whose earnings would put her comfortably in the top 15% of Indians, informed me that she was taking leave because she had to go to her village and buy land - 20 Acres of it!

In 1950, just after independence, 75% of the workforce in India was engaged in farming. Agriculture was the biggest contributor both to employment and to the GDP. Over the years, it has been declining, and today, only about 45% of the workforce is employed in farming.

Having said that, India’s population in 1950 was 358 million; today it stands at 1.45 billion. Therefore, if you look at it in absolute terms, the number of farmers in India has gone up from 268 million to 652 million. This, in turn, implies that the land that was being tilled by fewer people is now being tilled by a larger number of people, and proportionately, the land holding per farmer has charted a downward trajectory.

85% of the farmers in India are smallholder farmers with less than 2 hectares (5 Acres) of land.

With such small farms, it is not possible to eke out a living for an entire family. This has created a flood of migrants who are moving away from their villages to the cities in search of work. They live in urban slums and perform menial and daily wage labour in cities to earn a living. That this income is higher than what they would earn at their farm should cause us to pause and think.

The very same people were left stranded and walked back to their villages when the lockdowns were put in place during the pandemic. Some of them were forced to walk hundreds and thousands of kilometres to get back home. Nevertheless, they came back.

Farming is becoming more and more unviable at smaller scales. Not only that, but it is also no longer aspirational amongst those living in villages. The youth in the village want to leave for the cities. Part of the reason there is a fertility collapse in South India is that most rural households wish to educate their children so that they can find respectable jobs in the cities away from the villages. Most cannot afford to put together the resources to educate even one child.

It is getting to a point where there are no ”youth” to be found in villages.

Then, there is another India.

Techies who work 16-hour days in glass prisons to earn obscene sums of money. They burn themselves out following these insane work routines.

While the evidence is anecdotal, I have started to see many such people who are burnt out and investing their money to buy a plot of land to start farming. They can buy a fairly large plot (>30 acres) of land for a sum which would get them a small three-bedroom apartment in the city. They are educated, well-to-do, aware and have the patience to learn organic agriculture. Not only that, they have the ability to connect with the market and get themselves the right price for their produce. They want a simple life which can also provide them with a means for a steady and stable income while producing something real. Something that connects them to land and people.

These individuals buy large parcels of land. 10 hectares or upwards and cultivate several crops, and vegetables that they either package and sell on their own or, in certain cases, even process the produce to deliver an end product.

Is this how India moves or transitions to large holder farms? Will this be the way we make farming a more viable engagement?

Are all the rural folks going to end up in cities, and city folks going to end up in the rural belt?

With CDs and cassettes, you would listen to one album a time, or if you had mixed it yourself, you would have a few albums at most.

By the 2010s, internet speeds had improved wildly, and thus came streaming. Suddenly, the entire music library of the work was available at your fingertips. This broke music even further, and we are moved to consuming music piecemeal. One track at a time.

Last week, I was working from home, and I decided to just revisit an album by Michael Learns to Rock and play the entire album. One thing was that I seemed to remember was which track followed just because I had listened to the entire album so many times. But more importantly, there was a flow to the album. There was a story that they were trying to tell with the album, and all the songs were connected.

The other being that every album has good tracks and the not-so-good ones, and when you listen to the entire album, you learn to appreciate both. Songs do not have to be breakout hits for them to be worth listening to. There are so many that were not hits but are really enjoyable.

The ability to enjoy creativity in its entirety is being lost.

Everyone across the world has heard Gangnam Style by Psy, but cannot name another song by him.

It leads to the degradation of creativity as well. Everyone is chasing that one hit. They are not extending any thought into their work. They just want a quick hit. One big hit and they can call it a career.

I had written about this almost a decade ago in February 2016.

Songs have been a means through which emotions and stories were communicated. What makes a song beautiful is the poetry and the metaphors, which make several interpretations possible. It automatically implies that you must give it time to grow on you, for the interpretations to set in and for the songs to get internalised.

With the lack of time and attention, musicians are forced to produce music that is catchy and will hook you up soon. This also means that most songs do not have a soul. Most songs use a particular word repeatedly to get you to like the song.

Source

Since I started this blog with albums, I want to know do any of you know the album that Gangnam Style was from?

Thanks to Trump, the year felt like a decade.

The year began with the impending ascension of Trump to the presidency. He entered office and put Elon Musk in power of DOG-E, and American government Workers faced uncertainties, the likes of which they had not since the Second World War. He promised to reverse all of the policies that Biden had put in place and declared “Drill baby drill”.

The Climate

This year we had wildfires in Russia, Turkey, Syria, South Korea, Albania, Bulgaria, Croatia, Cyprus, France, Germany, Greece, Montenegro, the Netherlands, Portugal, Spain, United Kingdom. In addition to that, 25 US states recorded wildfires burning 5 million acres and taking a lot of celebrity homes in LA. Canada remained the unrivalled champion with 160 fires burning through 21 million acres.

In addition to that, there was flooding in Milwaukee and Texas in the US. Queensland and New South Wales in Australia. Bolivia, Indonesia, Vietnam, Philippines, Indian, Pakistan, Sri Lanka, Nepal, United Kingdom, South Africa, Botswana, and Bolivia.

Then a bunch of world leaders flew into the Amazon to agree on doing nothing, for now, about the climate. They all have, at most, a decade or a bit more to live and that time would be better used creating “shareholder value” rather than taking decisions which will cause inconvenience and disruption to their “economic models”.

Shifting Sands

The tariff wars that were unleashed in April drove the panic purchase of more goods across the world. Markets gyrated at first and then just disregarded any talk of tariffs. The Financial Express wrote, “like a dog to a bone, Donald Trump seems to run back to Tariffs”. He alienated friends while foes rejoiced. Europe and Japan were made to accept one-sided deals, which they happily did. At the same time, Indian and China defied the US and did not accept any deal. These economies that like to call themselves the global North could not stand up to bullying!

2025 was an important year to unveil the new world order. Whatever the motivation Trump may have had, he exposed the weakness of the G7. The erstwhile colonial powers do not have any.

Killing Fields

To add insult to injury, the US has put the burden of bankrolling the Ukraine war on the Europeans. Trump was making changes to the immigration policy that would destroy the pipeline of talent that flows into the US using the H1B visa. For a brief moment, the Europeans thought they could roll out plans to attract that talent. Now that money will be spent buying arms to keep the war in Ukraine alive.

India attacked Pakistan to avenge the civilians killed in Pahalgam. For a period of time in India, it seemed like war. Cell phone networks were being jammed in India. A lot of “information” was being provided from the areas of conflict. Then both sides declared victory, and the war was over.

Israel, in the meantime, bombed half a dozen Middle Eastern countries. Israel attacked Iran unnecessarily. Iran turned out to be far more restrained and calculated than it is given credit for. They launched a bunch of missiles towards the US base in Qatar to demonstrate what contagion in that region could look like. The US made Israel immediately back down.

AI

In 2022, ChatGPT was released, and it captivated the imagination of many. Riding on the back of the “imagination”, OpenAI pushed for incredible amounts of capital to be committed towards the build-out of infrastructure to support AI expansion. The year was dominated by trillion-dollar investment talk and trillion-dollar scale, while the reality stayed far away.

Oracle leveraged its Balance Sheet to build capacity for OpenAI. Nvidia started investing in OpenAI. Even the house of the mouse, Disney, committed capital to OpenAI. All the money is being spent on creating data centres and building power capacity to meet the needs of AI. On paper, yes, they are building out infrastructure.

The wrinkle in the story - chips do not last as long as other infrastructure does. Spending trillions on building roads, rail, ports, or airports is fine. It gives you returns over decades. Chips are finished in 5 - 7 years. Imagine building an entire road network all over again every 7 years!

Is AI economically viable?

As the year draws to a close, an uneasy question about a small number of companies making circular payments to each other is beginning to rear its head. In the meantime, China is releasing models of comparative capabilities working at a fraction of the cost. America’s decision to ban Nvidia from shipping chips to China forced them to adapt.

The rise of China during the early part of this century was powered by cheap steel that it dumped into global markets. It seems like the US ensured that it would do the equivalent by dumping cheap AI models into the market and destroying the US AI industry.

Looking forward to 2026 -

The AI thesis will really be put to the test, and there will be a crash or a correction depending on who writes the headlines.

European governmental budgets will buckle under the load of defence spending on behalf of Ukraine. Will they call Zelensky corrupt and cut him loose, handing over territory to Russia? Will they risk fomenting unrest in their countries to continue a war for purely ideological purposes?

The Insurance industry will come under pressure both from Climate and Trump policies in both health and trade. Already, an insurance industry CEO was shot. Rising premiums will result in hard questions.

Enter Sam Altman.

Perhaps because of his name, he wanted to create the alternate man, which he dubbed Artificial General Intelligence.

Artificial general intelligence (AGI)—sometimes called human‑level intelligence AI—is a type of artificial intelligence that would match or surpass human capabilities across virtually all cognitive tasks.

Source: Wikipedia

Most code is written to operate in a specific area. Photoshop can do everything relating to images, but it can’t even work on videos, let alone write prose. Software packages have been great at doing specific pieces of work, but there is no software package that can do it all. By contrast, a human can learn to code and manage HR. A human can work across contexts and understand the specific requirements of that area and excel at it.

The moment GPTs were able to regurgitate words across a variety of areas, Sam Altman became obsessed with the idea of creating AI that could work like a human. Buoyant from the hype he was receiving after the release of ChatGPT, he claimed AGI would be possible by 2025. Much like Elon Musk, that date has become a moving target.

Why AGI?

In his mind, that was the best way to usurp the incomes of many people and corner that money for himself.

His focus turned from pushing the boundaries of research to turning OpenAI into a for-profit entity. He estranged and got rid of all of the research minds that produced everything at the company. Ilya Sutskever had a falling out after trying to push Sam Altman out of the company and left thereafter to start his own venture. Mira Murati and John Shulman left to start Thinking Machines Lab. Andrej Karpathy, who at Stanford played a critical role alongside Fei Fei Li to usher in visual recognition, left to start his own venture.

The vision has broadened while the bench strength has narrowed.

When you set out to please everybody, you please nobody. The pursuit of AGI has delivered precisely that.

I used Gemini last week, and it smokes OpenAI. Google is really flexing it with their search and Docs integration. Anthropic has become the gold standard for coding. OpenAI, in the meantime, has turned into a bullet machine.

Ask anything, and it will deliver 35 bullet points, which has given birth to a new term, AI Slop.

Why the cancellation?

A new directive from the Directorate General of Civil Aviation (DGCA) came into effect regarding Flight Duty Time Limitations (FDTL), which directed airlines to provide rest to flight crew, specifically -

Further,

The minimum in-flight rest period shall be a consecutive 90 minutes period for each crew member and 2 consecutive hours for the flight crew members at control during landing.

Source: DGCA

There were clear limitations placed on how long the pilot and the crew could be asked to work, and further, the duration of rest that needs to be provided thereafter. The document is pretty coherent and well thought out; you can check the link in the source quoted above.

All the people working inside a plane have to be ready to jump into action in the event of any mishap. Their alertness is subject to their mind and bodies being well-rested. The revised document was published on the 8th January 2024.

The leadership did not care what the circular said and assumed that everything would be fine. Worst-case, they would not comply, pay a fine and move on.

In some ways, they have managed not to even pay the fine by manufacturing this chaos! *Slow-Clap*

Indigo the Efficiency Machine

Indigo has been one of the consistently profitable airlines in the Indian aviation industry. It has made money by running its operations like a machine.

It achieved this by doing a number of things. Till a few years ago, it ran a fleet that was exclusively Airbus 320s, which enabled standardisation as well as speedy solutions to any maintenance problems. The ground staff did not have to deal with different types of planes. They also flew the Airbus like a bus.

The plane lands, it is turned around in 45 minutes, passengers start boarding, and it takes off. The plane rarely spends more than 75 minutes on the ground. I would argue that most buses get more downtime. This was a model that was perfected into an art by Southwest Airlines in the US, which allowed them to rise incredibly fast.

On Flightradar, you can see how any aircraft is run around the country.

This equipment (VT-NCX), for instance, is expected to fly 7 flights on the 6th Dec.

Every company aspires to achieve 100% utilisation since a lower utilisation is seen as inefficiency.

Poor people do not have any slack in their finances; this is what keeps them poor. Their utilisation rate of money earned borders on 100%.

When your operations are aspiring for the highest levels of utilisation, a slight deviation from that can cause the entire operation to fall apart. We saw this happen during COVID when shipping lanes went into a tizzy.

But when that operation involves people, even those people have to run like machines. Here enters the FDTL.

In the case of Indigo, that sword was utilisation.

The point to ponder here is that Indigo’s consistent profits were a result of staff who worked 12-hour shifts without fail. The government asked the airline to provide them with slightly more rest, and the company is falling apart.

We rarely acknowledge that what every company calls profits is essentially the accumulation of all the negative externalities that they dish out to the world. In this case, the externalities were being borne by their flight staff.

It seems like the profits of every company are their net debt to society.

It was in this context that I was reminiscing about the winters in Delhi during my childhood. Not the toxic gas chambers of today, but Delhi in the 80s. Delhi would reach 2 degrees Celsius and would see thick fog, not smog. The fog used to be so dense that taking a walk outside could leave your clothes with a thin layer of moisture on them.

If you grew up in North India during the 80s, there were some stupid things that were a part of life. I sometimes imagine why we made it so hard on ourselves.

(Not) Woollen Gloves - Jobless grandmothers could be seen sitting in the sun in the afternoon, knitting all over town. They used to knit useful things like sweaters, but also really useless things like gloves. Those nearly porous things never ever kept my hands warm. Their only value addition being the loss of dexterity. But all kids would wear it, hoping against hope that it would keep their fingers from freezing over. The fact that not a single adult wore one should have been a tell.

The great travesty is that it was not even wool. It was made of acrylic pretending to be wool. There was this company called Vardhaman, which used to sell knitting yarn with not one whit of wool in it.

Razai - A Persian word that came to India and was adopted into Urdu. This is the Indian version of the quilt. It’s essentially 25 kgs of cotton inside a stitched-up cloth bag. The razai used to weigh a ton and was always deadly cold to get into. You had to expend a lot of body heat to warm it up, and it would feel like your feet were perennially cold. Not to mention, folding it was a 3 people job, and it would occupy half of the bed once folded and look like one shapeless mound.

Upside, it was great to jump on.

Layers - The solution to any clothing being ineffective at defying the cold was to wear more of the same. You would wear a full sweater on top of a half sweater and top that off with a jacket. It was stitched such that neither would you be able to raise your hands higher than your ears nor drop them fully. The same would repeat itself with socks. One sock over another over another, and then wear canvas shoes. Like why?

Bus stops - Everything in Delhi was made of Iron. I suppose that was to ensure longevity. Bus stops would have iron railings that you could sit on while waiting for a bus. Of course, it used to be freezing cold and if it was foggy, bound to be slightly wet as well. Sitting on it would mean your ass would be wet. Pre-warmed railings were an asset! If someone was getting off to board a bus, you made sure you got that spot.

I survived all that and sometimes wish I could have it back!

Charles Lynch was born in an America that was still under British rule. He lived in Bedford County, Virginia. He was a large landowner, a leading citizen, and immensely wealthy as a result of his farming of tobacco and cattle.

Since he was a large business owner, he was approached by citizens to be a part of the Virginia Assembly, which he refused. In 1767, he was appointed the judge of the peace of Bedford County, Virginia. He served the House of Burgesses and the convention for 10 years, starting in 1769 and became a militia colonel.

To put down a loyalist uprising in 1780, Charles Lynch handed down sentences after a summary trial at an informal court. The suspects were handed sentences, including whipping, property seizure, coerced pledge of allegiance and conscription into the military.

His actions were legitimised by the Virginia General Assembly in 1782, and he served the Virginia Senate from 1784 to 1789.

This form of handing punishment came to be known as Lynch’s Law.

In 1780, Captain William Lynch of Pittsylvania, Virginia, led vigilance committees to maintain order during the Revolution. In 1811, he claimed that it was a compact signed between him and his neighbour to uphold their own brand of law independent of legal authority.

Charles Lynch had passed away in 1796.

In 1820, Lynch's Law referred to extrajudicial punishment honouring the wishes of a large number of people. By the 1880s, the meaning of the word Lynch had narrowed to extrajudicial killings of Black people by While mobs. This shift may have been a result of the work of Ida B Wells, who coined the term Lynch Mobs.

A GPU, which stands for graphical processing unit, renders images such as graphics on the computer screen. It needs to process all the pixels simultaneously so that it can render every pixel on the screen. They were an accessory 25 years ago for those who wished to play games on their computers.

The way AI algorithms work, they throw a ton of spaghetti on the wall and see what sticks. This implies the need for parallel processing, which GPUs excel at. CPUs which run your computers are better at sequential tasks.

Since Nvidia was the market leader in the space, it became the preferred supplier of GPUs to most companies that were building AI models. In some ways, Nvidia has become a proxy for the entire AI industry in the world. They have the fastest, most-preferred and well-tested GPUs in the world.

OpenAI announced ChatGPT, and the war for GPUs began. Companies are raising ever larger funding rounds to buy more and more GPUs to run larger and larger models all the pursuit of something called Artificial General Intelligence (AGI). AGI is about producing the sort of intelligence that can cut across subjects, much like humans do.

The agreed thesis is that if companies double down on the models and keep increasing the number of parameters, it would automatically deliver AGI.

For the past 2 years, companies have been doubling and doubling their orders to Nvidia. It reflects in their revenue.

There has been an even greater rise in their share prices. Their revenues have grown 5-fold, their share price 10-fold. That implies that investors are assuming that there is more growth to be secured.

Given all this, there is some strange dealmaking going on.

The profit machine, Nvidia, has been investing its profits into its customers!

NVIDIA and OpenAI today announced a letter of intent for a landmark strategic partnership to deploy at least 10 gigawatts of NVIDIA systems for OpenAI’s next-generation AI infrastructure to train and run its next generation of models on the path to deploying superintelligence. To support this deployment including datacenter and power capacity, NVIDIA intends to invest up to $100 billion in OpenAI as the new NVIDIA systems are deployed. The first phase is targeted to come online in the second half of 2026 using NVIDIA’s Vera Rubin platform.

Source: OpenAI

OpenAI will buy goods from Nvidia and give it paper in return.

Today, Microsoft, NVIDIA and Anthropic announced new strategic partnerships. Anthropic is scaling its rapidly growing Claude AI model on Microsoft Azure, powered by NVIDIA, which will broaden access to Claude and provide Azure enterprise customers with expanded model choice and new capabilities. Anthropic has committed to purchase $30 billion of Azure compute capacity and to contract additional compute capacity up to 1 gigawatt.

Source: Nvidia

NVIDIA and Nokia today announced a strategic partnership to add NVIDIA-powered, commercial-grade AI-RAN products to Nokia’s industry-leading RAN portfolio, enabling communication service providers to launch AI-native 5G-Advanced and 6G networks on NVIDIA platforms. NVIDIA will also invest $1 billion in Nokia at a subscription price of $6.01 per share. The investment is subject to customary closing conditions.

Source: Nvidia

Why would Nvidia invest its cash into its customers? Maybe its customers are not going to be able to afford its products any longer? Its customers are unable to make the kind of money that they should be able to and are about to fail? This is one way of keeping that from happening. By kicking the can down the road, Nvidia could be hoping that these companies would be able to find the kind of revenues that they hope to find.

When everyone is looking for gold, sell them spades. But the spades will continue to sell only if there is gold to be found.

You could loan them the money to buy the spades, hoping that at some point they will indeed find gold. What if they don’t?

People who would know more than we would,

A viral AI-driven analysis of US SEC filings has resurfaced the scale and frequency of Nvidia CEO Jensen Huang’s stock sales this year, showing the chipmaker’s founder executed near-daily liquidation of shares worth roughly USD 13 million per day for several months.

Source: Moneycontrol

This would translate to $286 million in shares sold per month, assuming 22 trading days. Why only $13 million? If he did sell more aggressively, it would get alarm bells ringing.

Thiel Macro LLC fund’s Form 13F filing indicated that the investor no longer had any shared in Nvidia as of September 30. As a result, his staggering departure fuelled the sale of more than 537,000 shares in the company from July to September. According to Investing.com’s analysis of the firm’s average stock price during this period, the shares’ sale price is estimated to be nearly $100 million.

Given the full-fledged Nvidia exit’s status, this shift has shrunk his fund’s equity book by nearly two-thirds. His holdings in the firm reportedly accounted for nearly 40% of his portfolio.

Source: Financial Express

Peter Thiel is selling all of his holdings in Nvidia.

The market was abuzz last week with the news that Michael Burry, who became famous for shorting the stock market during the 2008 mortgage crisis, was betting against Nvidia and Palantir Technologies. Both stocks fell recently, and the revelation of Burry’s position may have contributed to that.

Source: Motley Fool

There are several people making bets against Nvidia, and its own CEO is reducing his stake in the company. Why?

Unless the AI party is about to come to an end…

Quite frankly, Donald Trump has done everything in his power to crash the US stock market. Stupidly played with the tariffs globally. Antagonised allies. Played around with the largest trading partners, holding the relationship on a knife-edge. Kept flip-flopping on policies. The final straw in this stupid Olympics has been the government shutdown. It does not even seem like anyone in the US government is remotely bothered about keeping the federal government open.

Through all of this melee, the US stock exchange has persisted. It is up nearly 10% this year. But all of that evaporates very quickly when you take the AI trades out of it.

Source: Reuters

The tech stocks with an AI narrative are up 50% and that is the bulwark that is holding up the US Stock Exchange. Except that the AI story is what investors like to call unrealised potential.

AI has yet to translate into real value on the balance sheets of various companies. There is a rush to create infrastructure and solutions that would use that infrastructure, but who will be using these solutions at scale is not really something we know.

The Price to Equity Ratio, which is a measure of how much investors expect earnings to grow, reflects this. All of the tech major, Apple, Alphabet, Microsoft, have their P/E ratios in the mid-30s. The chip manufacturers such as Nvidia and AMD are in the 70s. Data centre suppliers such as Amazon are valued in the 40s.

Just for contrast, businesses that form the backbone of the American economy, such as ExxonMobil and FedEx, are valued at a P/E ratio of 14.

The entire US stock market is a big bet on AI at the moment. If you were to remove all the tech stocks, the market would be at best flat.

If the AI story comes apart, then what?

In India, there has been a great deal of consternation about the fact that we have not been building foundational AI models. We have not innovated much in this area and are net consumers of this technology. On the flip side…

The NIFTY100 is up 9% this year.

Source: Groww

Do you know the number of companies on the Indian exchanges that are up based on their AI narrative? Zip.

The Indian markets are free of the AI contagion, and if the AI train turns out to be a wreck, India is the anti-AI trade. It has survived Trump’s trade wars. It has been consistently growing, and it is mostly fuelled by domestic consumption.

So India offers the best hedge against the American markets!

Over the last decade, this law has opened up vast pools of capital for the organisations working in the development sector. HDFC Bank has the largest CSR Pool, which sits at close to Rs 1000 Crores (~$110 Million), which it gives away each year to various Non-Governmental Organisations (NGOs).

Source: CSR.GOV

The government publishes the stats every year, and these numbers can be analysed.

The interesting thing that I found in the stats is the steady growth of the outlay year on year. No company enjoys giving away money, and they would avoid it if they could. Despite the efforts of the best accountants, the CSR expenditure is rising at over 10% year on year.

To me, this is the strongest proxy for the India growth story. It also shows the strength of the underlying profit machines. Consistent and growing profits year after year.

If you are investing in an index fund in India, you need not be worried at all.