Mumbai Local Trains- True spirit and lifeline of this city

In our last blog we presented our take on the stress we Mumbaikars face while commuting and using the public transport. – In our last blog we presented our take on the stress we Mumbaikars face while commuting and using the public transport.

Now let’s look at another side of it… Life in a Mumbai Local… Millions of people who have been and will be using this amazing mode of commuting in this city of dreams will feel deja vu and for other non-Mumbaikars this will be little insight that ‘it’s not just a train ride to work but so much more’…

First of all, a big ‘thank you’ to the British Raj – for giving Mumbai its ‘lifeline of commuting’, the Railways. Nobody’s a real ‘Mumbaikar’ if they have not travelled in the local trains and come home smiling or sometimes, frowning.

Millions of people use this vast and extensive Mumbai railway daily to commute to work and so. The western, central and harbour railway networks are the lifeline of the city. The city would come to a near standstill of these networks would stand still even for a day.

Some Mumbaikars literally live in these trains if you consider the time they travel to work and back. It’s an altogether different social world that evolves during the peak morning and evening traveling hours and
dissolves thereafter to evolve again the very next day.
People from varied cultures, from various parts of the country who have migrated to Mumbai… The Rags… The Riches… and the Middle class all become a Mumbaikar when they board a Mumbai local…

It sometimes frustrates you, but at the same time the train ride also gets a smile on your face. To know what I mean, one needs to sit at Church gate station or Borivali station or VT or Virar and observe people. Here, people become marathon runners; they don’t want to miss that 9.25 local. It’s a matter of life and death to miss a train – even if the next train arrives in just 4 minutes.

If you are a newcomer, the crowd will probably make you feel claustrophobic, but if you are a regular, it will make you feel everything is fine. Remember, a lack of crowd at Mumbai’s railway stations indicates either a public holiday or that something is amiss.

Local trains in Mumbai are the best place to learn life’s lessons. The train teaches you how to fight your own battles and make a place for yourself in the crowd, it teaches you how to make friends with people, strangers mostly, and adjust with all species of people, something we humans need the most for survival. It teaches you how to handle a dominating mother-in-law, how to love your naïve daughter-in-law, how to cook, how to bargain, the inside and out of share markets, gold prices, and many many more things and of course, it teaches you how to sing in front of strangers. The cost for all this is simple bear the push and punches in the local trains, overcome claustrophobia in crowded places, get used to the crowd and noise around you and be ready to share, care and listen.

In these local trains, you see the real face of Mumbai. It tells you about the kind of people Mumbai is made of. One could be a stern boss in the office, but he is a friendly person in the train. The nice woman who is always ready with a smile for a stranger could be a strict, dominating person at home. You get to see nice, caring, and friendly people always ready to help and you also see scary, bitchy, frustrated people who always want to pick fights.
Here people make friends out of unknown people, share their life’s sorrows, and throw parties when they achieve something. People make these small train compartments and the people inside them their extended families, a part of their lives. Those 45 minutes to two hours of travel time become their welcome break from the hectic lives they lead. Movies and TV serials have been made on Mumbai locals.

Hence it becomes a matter of life and death when people miss their regular local. The Mumbai local teaches us Mumbaikars how to survive, how to live and enjoy no matter what.

It truly reflects the Spirit of Mumbai.

TQR Monetary Policy – Comments

RBI raised repo rate by 25 bps to 8%, against broad market expectations in its Third Quarter Review (TQR) of monetary policy. The reverse repo and MSF now automatically adjust according to the corridor. Midnightbreakfast was expecting it, wanting it, in line with our earlier stance of ‘no mercy’ on inflation. Had talked about it even in the last review of monetary policy.

RBI has devoted an almost a big paragraph regarding the ill – effects of persistent high inflation calling it ‘biggest threat to currency’, which ‘erodes the purchasing power’ of people, ‘an inequitable tax’ which hits the poor the hardest in its monetary policy review.

It further talked about how the ‘growth – inflation’ tradeoff, often raised in popular media is a ‘false tradeoff’ since inflation should always take first priority at the cost of growth even.

Since inflation eats into people’s income, savings and investments it resultantly affects growth. It talked about how the policy action was consistent with the guidance, which it was since core CPI and WPI both inched by in the last reading which was against the backdrop of a fall in the headline rates.

Guv Rajan seems to be in the habit of surprising the markets, which is good, in the sense that monetary policy is most effective when there is an element of surprise in it. This is where Guv Subba’s action seems to have found wanting. However, it would be unfair to blame him completely for the current state of affairs since the government was busy splurging and running huge budget deficits to fund the social welfare programs. He was trying to do what Guv Rajan is doing, i.e tightening to choke off inflationary forces.

Yields hardened even though the Guv had guided the action based on the explicit condition of hardening of “core inflation” which is what had happened. This shows that markets were as usual trying to run ahead of the reserve bank and started to take it for granted.

Midnightbreakfast, although supports the RBI action, believes there was no need to guide for accomodative monetary policy stance because it kind of dilutes the current action. Markets should be kept guessing of its next actions and it is only then it would price assets properly, i.e. higher yields.

TQR Monetary Policy

RBI is expected to announce its Third Quarter Review of Monetary Policy today 28th January 2014. Wide expectations of a status quo, i.e. Hold the Repo at 7.75%, with the Reverse Repo and MSF adjusting to 6.75% & and 8.75%.

Guv Rajan has been somewhat all over the place with initial hawkish stance (he hiked in his very first policy in Sep citing high CPI) and then status quo ever since (even though CPI spiked to 11% YoY in December). He also re – calibrated the MSF rate which Guv Subba had hike to over 300 bps over Repo citing currency volatility. With the currency stabilising ever since, Guv Rajan re – instated the MSF over 100 bps over Repo.

So far the 10 yr Benchmark has been hovering near the MSF so also the short term rates indicating that MSF being the operative rate. Market probably waiting for more data to get convinced that rates would come down secularly.

With core inflation rising in the previous readings, even though the headline rates came down driven by vegetables (the CPI i.e), ideally the RBI should be hawkish in its stance, if at all it doesnt hike rates by 25 bps.  

How about scrapping the site for Mumbai’s fourth airport viz., Navi Mumbai?

This suggestion by Swaminathan Aiyar in today’s ToI in this article http://blogs.timesofindia.indiatimes.com/Swaminomics/entry/the-case-for-offshore-airports seems plausible. What with huge cost overruns for the proposed 4th airport at Navi Mumbai, the project now would cost ~ Rs 14k Cr or 5x the original cost, ridiculous to say the least.

There is now talk of considering an alternative location, Madh Island wherein a Dutch consultancy firm is assessing the technical feasibility of an offshore airport. Yes, an airport on an offshore location, which is the norm in land starved countries, viz., Japan, South Korea etc. which can be built at a fraction of the cost.

With land being scarce and land acquistion exhorbitantly expensive, this could be the way out for developing countries like India wherein increasing air travel undertaken by Indians would increase air traffic which would result in the need for more airports.

But, another important reason for the same would be to break the back of the land acquistion racket in India. Land sharks are moving around in and around the city gobbling up an stretch of land. For far too long, policticians and speculators have been buying up land before any major new project comes up anywhere since they are privy to information. These are the people who are the beneficiaries of the compensation and not the original villagers. With 25 Cr per acre compensation to such speculators, it would be nothing less than sacrilege. Scrapping the site would cause land prices to crash resulting in untold losses to these speculators for a change.

Speculative activities in real estate is assuming menacing proportions and should be killed soon.

‘Wow’rinka prevails over Nadal

Swiss no 1. Stanislaus Wawrinka beat heavy favourite Rafael Nadal to win the first grandslam of the year, the Australian Open at Melbourne. Wawrinka won 6-3 6-2 3-6 6-3. Nadal hobbled out of court in the middle of the second set for a medical timeout after a back injury along with the blisters in his playing hand. Wawrinka appeared distraught and was seen complaining to the referee. The crowd too joined him and booed Nadal.

Wawrinka took a 2 seat lead and looked amazingly composed and the discomfort looked obvious on the injury hampered Nadal’s face. Infact, Sampras, after the semi – finals, had said that it would be difficult for Wawrinka to stop Nadal. The 8th seeded Wawrinka, by beating Nadal (No. 1 seed) and Djokovic (No. 2 seed), became the first player in 2 decades since Sergei Brugera to beat the No. 1 and No. 2 ranked players and the first player ever to beat Nadal and Djokovic in the same tournament. With this win, Wawrinka seems to be getting out of Federer’s shadows, who himself would face increasing competition in the form of Wawrinka at the top from other than the top 3.  

Nadal battled through injuries thorughout the match and the tournament. Sampras admitted, “The movement he has is incredible, he is able to adjust his shots on the run, I’ve just never seen anything like it. He added, “He’s not looking at 14 (grand slams), he’s looking beyond. Realistically he could well get to 17 or 18 majors when it’s all said and done. He’s a great credit to the sport.” in a BBC interview. Nadal would surely go past 14, if not now, but soon enough.  

The best man today won. Tennis has a new champion, Stan Wawrinka.

Sochi Winter Olympics – Putins show of strength

The 24th Winter Olympics would be held in Sochi, Russia from the 6th to 23rd February 2014. This is the first time that Russia would be hosting Olympic games post the break – up of the Soviet Union. With over 15 disciplines across skating (3 disciplines), skiing (6 disciplines), bobsleigh (2 disciplines), biathlon, curling, ice hockey and luge, it is one of the largest winter olympics.

The mascots for the games are a polar bear, a snow hare and a leopard. Apparently, the residents of Sochi had earlier selected a dolphin from 4 choices given to them in a referendum of sorts back in 2008. There was also a frog which was selected in an online poll. However, these were dropped and the earlier mentioned three were ultimately selected.

With an estimated cost of building the Olympic infrastructure topping ~ $ 50 billion (originally budgeted ~ $ 12 billion), Sochi 2014 is the most expensive Olympic games ever surpassing Beijing 2008, which cost an estimated $ 44 billion. The infrastructure includes the venues (15 modern venues to be built), upgradation of the critical telecom (Avaya is the technology partner for the games, over 700 2G/3G/4G mobile phone towers have been put up with 4G connectivitiy @ 10 mbps provided by operator Megafon), power (critical to ensure no power outages during the games) and other infra including an addtional airport terminal and back up airports, additional sea port terminal, metro, train stations. Much of the cost over – runs have been blamed on corruption. Sochi games cost more than all the previously held winter olympic games.

Controversies sure follow events of such scale. Firstly, Russia’s ‘anti gay’ laws have resulted in effective boycott of the games by western leaders. Secondly, there have been widespread corruption allegations surrounding the cost over runs of the games. Lastly, there were 3 bombings in a span of 3 months, 2 of which almost back to back in the Russian town of Volgograd. Chechen terrorist groups claimed responsibility for the same resulting in massive security anxiety surrounding the games. Russia supported in the Syria – West standoff. Apparently, according to the Daily Telegraph, the head of Saudi intelligence had offered a security guarantee of the games in exchange of breaking of the deadlock over Syria.

With such huge sums and more importantly reputation at stake, Prez Putin would go all out in ensuring the games go on smoothly.