ArpitGarg's Weblog

An opinion of the world around me

Archive for July 2013

Detroit Bankruptcy: What it means?

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Detroit pitching for high profile bankruptcy evoked nostalgia, given that I was part of the investment bank, which was one of the high profile bankruptcies of the 21st Century. I have only read of the Russian default of the old, but seeing an entire city go bankrupt in our times, is entirely different.

Detroit is more significant as it was the boom baby, the once-mighty motor city and the pillar of American economy. The situation is also symbolic of declining manufacturing might of US (barring the Weaponry).

How does bankruptcy work for a city?
When a firm goes bankrupt, the assets are sold off and creditors paid off on basis of debt seniority. If Detroit goes bankrupt eventually, it may have to fire public employees. May have to sell off its properties, which includes government offices, public schools, parks and whatever city owns (not the private property). Legally speaking all of it might happen. But since it’s a city, with humanity and politics involved, it might not come down to this.

Newly appointed Emergency Manager of Detroit Kevyn Orr, has put together a plan to save the city. It can be read here. I have tried to summarize the plan and what holds for Detroit in the future.

How bad is the situation?
Population has declined from 1.8mil in 1950 to under 0.7mil in 2012, showing clear signs of decay. Unemployment rate has shot up from 7.3% in 2000 to 18.6% in 2012. Total number of employed people has gone down from around 350k in 2000 to 275k in 2012.

City tried by increasing taxes which resulted in businesses leaving and people migrating. Though tax %age got higher, the quantum of tax kept shrinking. To quote from the plan, “The City is currently levying all taxes at or near statutory maximum rates.”

Reduced security spending over last 10 years resulted in 40% job cuts in Detroit Police Dept. This has led to DPD’s response times getting extremely high. Crime rate has become highest in its population category. Add to this, ageing police cars and fire equipment.

Lack of maintenance has left 40% street lights non-working. Almost all public parks have been shut down (317 open parks around 5 years ago). Public transport has taken a beating due to unmaintained buses. Around 40,000 buildings have turned into dangerous structures sans repairs.

Estimated debt has ballooned to 18billion dollars. Citi has already deferred interest payments to creditors and contribution to pensioners. Bonds have no value anymore. Credit rating has plummeted from A in 2003 to CCC in 2012 (Courtesy Fitch Ratings)

Why is the need for bankruptcy?
It’s not exactly bankruptcy but protection from creditors till city restructures itself. In other words since Detroit does not have money to pay creditors and pensioners, it has to take some legal recourse to save itself from lawsuits demanding the same.

To quote from the plan, “The City cannot stabilize or pay creditors meaningful recoveries if it continues to shrink. Since the City will not generate sufficient cash to pay all liabilities, alternatives have to be considered. Need to reform the City government operations to improve efficiency and reduce costs.”

What’s in store post bankruptcy protection?
Well if City wants it can just deny paying its liabilities and no one can sue. It won’t be able to raise money by bonds and other resources as no one will be ready to lend. City will most surely increase Tax Rate forcing the remaining businesses to consider moving out of the city. It will further fire city employees to reduce operating costs, thereby shooting up unemployment rates.

How the future seems bleak is summarized by the following quote from the plan, “Where cost savings or service improvements can be achieved, the City will explore potential outsourcing of functions.”

For all I can say, its Gotham time for Detroit. Hope it finds its own Bruce Wayne.

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Written by arpitgarg

July 19, 2013 at 6:11 pm

मन की सुन

with 2 comments

गम को लेकर दुनिया भर का,
खुद को क्यों ग़मगीन करूँ,
क्यों इंतज़ार दिन ढलने का,
मैं आँखें क्यों ना बंद करूं।

क्यों चौबेजी मैं बन बैठूँ,
जब छब्बे बनकर मस्त रहूं,
माथे पर क्यों पड़ने दूं बल,
जब खाऊं पियूं बलवान रहूँ।

सोच सोच के क्यों हारूं,
जब हरा हरा के सुचवाऊँ,
इज्जत पे मेरी बन आये,
इतना भी इज्जतदार नहीं।

आसां नहीं, इतना जीवन,
सुनते-सुनते जीवन बीता,
एक कसक रह गयी जीवन में,
क्यों बहिर ही मैं पैदा न हुआ?

हर पल रहना बोझ तले,
क्यों चाहूं मुझको ईश मिले,
बोझ तो गधा उठाता है,
औ पीता तो चीता भी है।

जटिल नहीं होता है कुछ,
जटिलता बस अनुभूति मात्र,
कैलाश ही सबको चढ़ना है,
कभी कुआं खोद के पानी पी।

जब लगे कि है शामत आयी,
क्षितिज ताक, जरा मुस्करा,
गुनगुना उठ मस्ती की धुन,
कान बंद, बस मन की सुन॥

Written by arpitgarg

July 19, 2013 at 11:22 am

Posted in Hindi, Poetry

Tagged with , , , ,

What is Love, I wonder

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Sweet kiss of an Angel,
Deadly curse of a Demon,
Is it sunshine, Is it Thunder,
What is Love, I wonder.

Scolding of a Father, fear,
Affection of a Mother, care,
Is it adrenaline, Is it slumber,
What is Love, I wonder.

Sharing of a Sister,
Snatching of a Brother,
Is it hunted, Is it hunter,
What is Love, I wonder.

Blind trust of a wife,
Support through all strife,
Is it up high, Is it down under,
What is Love, I wonder.

Labor for two square meals,
Finding a way, making deals,
Is it earn, Is it plunder,
What is Love, I wonder.

The more I try think,
The more I deep sink,
Is it abstract, Is it number,
What is Love, I wonder.

Written by arpitgarg

July 17, 2013 at 7:48 pm

Posted in Literary, Love

Tagged with , ,

The Others

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As we grow up, we imbibe what we see around. Our beliefs, our personality are a sum total of what we gather over the formative years from people we meet. A part of it also comes from our own cognitive makeup, where we accept, reject, and modify what is thrown to us. This is what makes an individual.

In various chunks of our life, we meet certain people; stay at a particular place before moving on to new place and new people. School/College/Changing Jobs. All these make up the said chunks in our life. We try and adjust to our surroundings as we see them; we try and adjust to people as we meet them. This is what we call acclimatization.

Sometime what happens is we try and adjust too much, as our fears get better of us. Fear of not being accepted, fear of being out casted, fear of being ridiculed. These fears start shaping our personality from then on. Sometimes it’s not even fear, it’s just that we are short on confidence, so we try and blend in and follow without asking.

What we don’t realize is it’s affecting our individuality. It might make our stay in the current chunk feel better, but it jeopardizes the upcoming chunks in our life. Due to our fears we make certain compromises and pay for these compromises all our life.

For example when we are in college, we do a lot of things due to peer pressure. Drink, Smoke, Career choices are few of such things. What we don’t realize is the peer group that we are succumbing too, is just for the current chunk of our life, it won’t stay with us forever, but the choices we make due to it, will haunt us for life.

It’s important to use our cognitive machinery a lot more while imbibing from our surroundings. Always think of long term impact of our choices. Never ever do things to please others. Let them take a hike.

Written by arpitgarg

July 10, 2013 at 3:07 pm

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