Desicritics Author: Dr Bhaskar Dasgupta

CFO or CEO: Who Influences Earnings Management More?

Dr Bhaskar Dasgupta — Sat, 20 Mar 2010 11:01:53 EDT

Well, the previous idea was that earnings management was primarily driven by the CEO and therefore regulators around the world asked for the remuneration details of the CEO. But recently the SEC has started asking about the remuneration of the CFO as well, which in hindsight, makes perfect sense. After all, the CFO is the person who is actually managing the entire financial process which culminates in the production and propagation of the financial and earnings figures and announcement. A recent paper sheds some more light on this rather interesting and topical issue.

The authors cover the S&P 1500 firms for which CEO and CFO compensation data is available over the 1993 to 2006 period giving a total of 17542 firm years. They judge both cash pay and total pay, the latter including everything else such as option grants, incentive plans, etc. On an average, the CFO earns 1/3 of the CEO with an average equity incentive ratio of 11% for CFO’s compared to 24% for CEOs. Please bear in mind that 2002 saw the introduction of SOXA and the authors do include the impact of this on accounting treatments such as accruals management.

Prior to the introduction of SOXA, there is a positive association between the compensation of both CEO’s and CFO’s with accruals management. In other words, more the incentive, more are the accruals within the financial statements and the influence of the CFO is higher on the accruals management element compared to the CEO. The introduction of SOXA meant that active accruals management was dramatically reduced and there is no longer any relationship between the incentives to CFO and CEO and accrual management.

How about beating analyst forecasts? As you would know, analyst forecasts are extremely important in forming the market sentiments which drive how the market reacts post the earnings announcements. Similar to the above finding, the authors find that pre SOXA, CEO and CFO incentives are positively associated with the likelihood of reporting positive earnings surprises. They also find that greater the incentive, greater was the chance of an earnings surprise. In the post SOXA period, the equity incentives of the CEO is no longer positively associated with the likelihood of beating analyst forecasts. But surprisingly, the CFO is still highly influential in the likelihood of beating analyst forecasts.

The authors also carry out some additional tests and find:

We also find some weak evidence that earnings management incentives are strongest when the manager has compensation that is more sensitive to stock prices and the firm’s stock returns are more sensitive to accounting earnings.

In other words, the role played by the CFO is almost independent of the CEO at least in terms of accrual management, earnings management and general financial statements to the wider world. If I was a shareholder, I would peer at the CFO much more closely and if there is an element of equity incentive compensation to the CFO, then peer even more closely with a beady eye. I can see analyst models start to incorporate this as a factor. On the flip side, I am sure the CFO’s will be reading this and demanding more cash based compensation compared to stock based compensation. Not sure what the answer is, but it puts further pressure on the remuneration committee, the audit committee, the external auditors and regulators to make sure that the firms are presenting a true and fair picture of the accounts.

John(Xuefeng) Jiang,Kathy R.Petroni and Isabel Yanyan Wang, CFOs and CEOs:Who has the most influence on earnings management?, Journal of Financial Economics, doi:10.1016/j.jfineco.2010.02.007

Book Review: Bhagwata Purana, Skandha Two, Part One

Dr Bhaskar Dasgupta — Mon, 15 Mar 2010 19:57:57 EDT

You know my great idea about writing one essay on each Skandha? Well, I am afraid that it became impossible for me to stick to my original plan in the second Skandha itself, as there are far too many concepts and ideas that I want to try and do justice to. The Skandha starts with the story of how Vyasa Muni first composed the Bhagwata Purana (BP).

You might already know that Vyasa Muni was the original compositor of the Vedas, but the Purana is silent on when exactly he wrote it in Hindu cosmological terms, although we know it was written after Krishna’s death, which is tentatively given as 3228 BCE (according to the wiki entry). The Purana, on the other hand, says that Vyasa was born in the Dwapara Yuga. Take a look at this calculation which talks about some seriously huge time frames. Time is defined in the top level as Brahma Years. We are in the first day of the 51st year of Brahma (he is a middle aged God right now). Each day and night in an year comprises of a Kalpa, which is further divided into 28 manvantaras and we are in the 7th day manvantara. Each Manvantara is made up of 71 mahayuga’s and we are in the 28th mahayuga. Each Mahayuga comprises of four yugas namely Satya Yuga, Treta Yuga, Dwapara Yuga and Kali Yuga. We are currently in Kali Yuga. The time in human Christian Gregorian Years is roughly 432,000 solar years.

So extrapolating from this (and bear with me, I have no way of confirming this), Vyasa was born before 3228 BCE. Given that the average human life span in the Dwapara Yuga was considered to be approximately 1,000 years, he could have been born and actually composed the BP any time between 3228 BCE to 4228 BCE, but the actual book took shape in the 3rd millennium BCE. For the longest time, this kind of thinking about time blows my mind, but I have that down as a potential research project to think about. Take a look at this article by Ramesh Rao for an interesting perspective on time.

But let’s get back to the BP and its origins. The above is from a mythological perspective that is; the real truth is much more complicated. As of the current state of historiographical research, there is simply no evidence of when it was originally written and by whom. The wiki entry for the Vedas is a good example of the confusion about the dates on the origins of the Vedas, but it’s aimed at a date of 1,000 BCE. This sort of conflicts with the reputed death of Krishna around 3228 BCE, so what happened in the middle 2 millennia?

However, I am not writing an analytical paper here, I am talking philosophy and mythology. Hindu philosophy (if this kind of a formulation can even be said) simply has too many strands to worry about exact timing or authenticity of the author, unlike say the fact that Gabriel taught Mohammad the Quran or there is a gospel by Mark. How about the philosophy that time is essentially an illusion (maya)? If it’s maya, then is it really important to know the author or the time? We also need to know that if we start ascribing the authorship to a particular person and time, we run the risk of it sounding fallible, which really cannot be done now, can it? The other way of looking at this is that there is simply no origin or that the Vedas and the Puranas were and are: unauthored, unreal and eternal at the same time. When the (atma) soul can be pure consciousness without content, then extending that analysis to the Vedas and Purana can mean content without consciousness relating to temporal aspects such as authors or time.

The BP talks about how Vyasa Muni divided the original single Veda into the four Vedas that we know now, mainly because he realised that in the Kali Yuga, mankind cannot handle the full weight of God’s word, so had to be fed in small broken down chunks. He then gave each Veda to one of his disciples and asked them to further teach humans. As women, sudras and other impure members of the Brahman class were not eligible to read and hear the Vedas (don’t go there yet, I will return to this topic sometime in the future), he also wrote the Mahabharata so that even the women, sudras and impure people could attain moksha. But Vyasa Muni was not happy and less than satisfied with his work on the Vedas and Mahabharata. Narada Muni came around and identified his cause of dissatisfaction. Narada Muni said that he has not described the Lord Vishnu in detail and that is the reason why his work does not satisfy him. Narada Muni then proceeds to tell Vyasa his own life story and how he became a Vishnu devotee. In one of his past lives in another Kalpa, he wandered the earth in search of God and finally he sat to meditate for eons. Finally, Vishnu manifested himself to him and Narada was enlightened. Vishnu said that Narada will find the Lord when all desires have been quelled, but he will be with Narada all the time. Saying this, Narada departed leaving behind Vyasa full of determination to explore and compose the story of Lord Vishnu. Upon completion of the BP, Vyasa Muni taught the secret Purana to his son, Suka.

Then there is a bit of a jump and the third section talks about the life history of Pariskshit, son of Abhimanyu, who is the ruler of Hastinapur. Remember the story about how he was saved in his mother Uttara’s womb, by Krishna when Ashwathama tried to kill him using the brahmastra? Anyway, moving on, the BP talks about how righteous he was, how he banished the demon Kali (not the Goddess Kali) and saved one legged Dharma Deva, the God of Truth and Bhumi Devi, Mother Earth from Kali’s depredations. Interestingly enough, the four legs of Dharma Deva, who manifested himself as a Bull, represent austerity, purity, compassion and honesty, but Kali Yuga broke three of them by pride, lasciviousness and inebriation. Only honesty was left and even that was being destroyed by the Demon Kali. So Parikshit banishes the Demon Kali to the gambling dens, whorehouses, and in houses of slaughter. By doing so, Parikshit kept the demons of the Kali yuga at bay, but then disaster befell him.

He was hunting and reached an ashram thirsty and hungry. Looking around, he could only see a rishi deep in meditation and despite Parikshit’s entreaties; the rishi would not wake up to give him water or food. Becoming furious, Parikshit draped a dead snake around the rishi’s neck and rode away angrily. Then the rishi’s son came back, saw the snake, learnt the background and cursed Parikshit with death in seven days from snakebite. On his return to the palace, Parikshit was beset with sorrow and regret at his treatment of the rishi and then learning of the curse, decided to renounce his kingdom, go to the banks of the Ganga river, medicate on Vishnu for the remainder of his days while fasting.

When he sat down, a whole host of other great rishis came to him. Atri, Vasistha, Chyvana, Shardavana, Arishtanemi, Bhrigu, Angirasas, Parasara, Viswamitra, Parasurama, Utathya, Indrapramada, Indhmavaha, Medhatithi, Devala, Arishtisena, Bharadvaja, Gautama, Pippalada, Maitreya, Aurva, Kavasha, Agastya, Dwaipayna Vyasa and Narada all joined him. There is a reason why I am repeating all these names. These names are our greats. They have, in effect, given us our religion. They were the first teachers and telling their names again is a way of worshiping them, paying obeisance to them and recognising our debt to them.

Finally Suka Muni arrives and Parikshit asks him how best to purify himself before death, to which Suka Muni replies referring to the BP as the best way to purify the body and soul. Parikshit asks about the form of Vishnu that he would meditate on and Suka describes the Lord to him. This was a stunning description and I was seriously taken aback. I am not going to give the full description, but it involves patala, the soles of his feet, bhumi his hips, and the sky as his navel. Indra and other Devas are his arms, agni his tongue, the sun and moon are his eyes, Yama is his teeth, his laughter is Maya, modesty is his upper lip, while greed is his lower. Prajapati is his penis, while Mitra Deva and Varuna Deva are his testicles. Vayu is his breath, time is his movement. Twilight is the garment he wears, brahmana his mouth, kshatriya his arms, vaisya his thighs and sudra is his feet. This is whom Parikshit should visualise.

The formulation of the Lord’s description took my breath away. With my puny mind, I simply could not comprehend this vast assemblage at all, which is why I am quite envious of those who can. Can you imagine somebody being able to visualise this wondrous image? What an imagination one would require! What a breadth of vision, what faith! I felt so insignificant at just the description of the Lord Vishnu.

But now I have to draw this exercise to an end. In the next part, I will be talking about how Suka explained the way of the Dhyana, the route to Moksha. This is not an esoteric description, but something with concrete details which man can grasp. This will follow with a description of how Brahma created this universe and a description of the incarnations of Vishnu and ending with the numerous questions that Parikshi asks of Suka.

All this to be taken with a grain of piquant salt

Photo Essay: Circumambulation of the London Fashion Week

Dr Bhaskar Dasgupta — Wed, 10 Mar 2010 09:20:02 EST

You might have heard about the London Fashion Week. On the global fashion calendar, it is right up there with the Milan, Paris and NY ones. Not that I would know as this kind of stuff is a bit foreign to me, being a boring old git who works out in the sticks where the dollar signs roam and grown men weep. In civilisation - read in the centre of town - stuff happens, women exist and fun things like fashion shows occur. As it so happens, I had gone to check out Michelangelo's Dream drawing exhibition and when I stepped out I noticed that the passageway was absolutely infested with utterly gobsmacking, amazingly and totally thoroughly wonderfully excitingly mysteriously beautiful women of all shapes, sizes and colours sporting all sorts of hair styles. So turned right instead of left and circumnavigated the Kaaba of Fashion taking photographs. Only some of the photographs are shown here, see the full Slide Show for bigger resolutions and more photographs.

Two lovely ladies in front of a giant poster.

This kind of fine artistic inquiry requires good infusions of hot drinks, so I sat in front of this temporary coffee shop and ordered a tea.

See what I mean by staggeringly beautiful girls?

Some big shot was being interviewed.

That grey dress was fabulous, looked brilliant, although I am not sure these boots go well with that dress, but then I guess it's a matter of taste.

Another model .

Canon, the camera company, sponsored the London Fashion Week.

Lunch is being served. Low carb, low fat, low calories, low everything in fact!

I couldn't recognise ONE designer on this list, but then again, my designer range runs from Marks and Spencer (for clothes) to Clarks (for shoes). What else does a man want? But here? BLOODY HELL!

I wasn't clear what this was for, but then I figured, it must be for people who have reserved seats. The grammar was a bit weird there though.

Another confusing sign. Catwalk ok, Show ok, Space ok, but combine them and BD gets confused.

It's a tad empty.

Almost all the women had lovely head coverings.

Legs and heels. Cobblestones and heels? You are heading for trouble, young lady!

Backstage I know.

Dont be trashy, recycle. Hmmm, ok. Though trashy in my dictionary means something else entirely ...

Some very interesting photographs on display.

Loo signs, but the woman looks strange…

The number of girls I saw smoking was amazing, why do all these girls smoke so much? Maybe to curb their appetite or deal with the tension and stress?

An unlocked crew door, I was tempted to sneak in…

The photographers entrance.

More young ladies.

More comings and goings. The photographer on the left was wearing the tightest tightest pair of jeans I have ever seen, not good for the health, my friend.

Another smoker.

And this jamboree will happen again next year.

Photo Essay: When I Am Gone - Harrow Cemetery

Dr Bhaskar Dasgupta — Mon, 8 Mar 2010 08:54:31 EST

The Harrow Cemetery is not something that you would naturally find highlighted in any tourist map. In any case, it is far too quiet to be on them. People live and die and are buried. There is nobody famous buried there, just normal people like you and I. People who have lived out their quiet happy lives and then either quietly died in their beds or during wars. And when they died, they were buried in this suburban cemetery.

Cemeteries fascinate me for a variety of reasons. Unlike mainstream Hinduism, where bodies are cremated and nothing remains neither in public nor in private, other than perhaps some old yellowing sepia photographs hung on the walls, Christianity offers you some form of after life presence in the form of graves. It is a very quiet place. When I walk around in cemeteries, I can almost feel the regrets, the tears, the resigned acceptance of the dead and those who were left behind. To me, it is a very charged place indeed. Then you extend the time horizon and see the graves which are more than 100 years old. These are not the Pyramids or the grand Mausoleums of Gandhi, Napoleon or Westminster Abbey where the rich and famous are buried and where people come to admire and look at the graves. The people buried here are ordinary people,and once their immediate descendants are dead and buried as well, their memory on earth disappears.

They did their bit for society, they produced children, produced goods, fought for God, King and Country, and it is a bit of a shame that they are not recognised and nobody whispers a prayer for them long after they have gone. As usual, I took far too many pictures than I can show here in this essay, they are all shown here in this slide show with bigger resolutions (warning, 77 total pics, get a cuppa tea while seeing this).

You enter the cemetery through a set of old carved wooden doors, sadly not maintained these days. They are chained open, which is a shame, they would have looked lovely. Then you see a red brick building which presumably is the place you would rest the coffin and where last respects are paid.

These are the newer graves to the right as you enter the cemetary. The top photo shows a grave with tender plaques commemorating a mother. Then you have Christopher Bell, 1937-2008, who was a husband, dad, granddad and great granddad. Now there is somebody who left behind a lot of descendants. I also noticed several Indian sounding names like Anita Tulsidai Gulpe, Dr. T Prakash, etc.. Not surprising, Harrow has one of the highest Indian origin Brits in the UK and presumably there would be Christians amongst them.

A very old stone grave market, all the inscriptions had worn away.

This was sad, it is a grave presumably of a small child and the parents had put up this stone statue on top of it. A very old grave, but some vandals knocked off the statue's head. You can see it lying to the left of the statue at the base. Very pitiful indeed. Sadly, this vandalism is visible across the cemetery.

Dust to Dust, and then ivy takes over.

Another decapitated statue on a grave. The boy, Peter, died on October 5th 1936, just before World War II broke out, but you still see flowers on the grave. Despite the injury to the statue, somebody still remembers Peter.

This grave had lost most of its inscriptions, but nature remembered its occupant. See the daffodils pushing their way up from the grave? Perhaps you cannot find a better remembrance of somebody’s passing.

Another old grave with an intact statue this time, of a little boy, under the shade of a tree. Sad but peaceful.

Then typically, you have dogs befouling the cemetery, I saw at least 5 dogs in the cemetery being led around, presumably to take a dump. Clean it up, you lazy gits! And on the right, I guess somebody negligently threw a can into the grass.

One out of 10 graves was a war grave belonging to a person from the armed forces from all over the world, I saw graves which belonged to Americans, Canadians, etc., of all ages and from all parts of the army, navy, air force, marines and of all ranks. But the bottom photograph really talked to me. Nothing significant in the person himself, just a private, from a local regiment, who died on 10th of March, 1918 in the World War 1, aged 21. One of the sheer numbers of men who died on the muddy fields of Europe in that war. What was really touching was what was written at the bottom, “Our Only Son”. Made me try to swallow a lump in my throat. No man should ever have to see his only son die. I can just imagine the couple, standing silently in front of the grave, seeing their entire future being buried with their boy. And they might have lived for decades after, slowly and pensively wondering about what would or could have been. The three words are very simple, yet very touching.

Here was another touching grave. Patricia died first in 1968, and then Walter died in 1997. As the two words say at the bottom, "Together Again", even after all those years.

This grave is a bit sad, Celia Constance Smith died in 1941. The other side of the stone book was obviously left empty for her husband or whoever else, but for some unknown reason, it remains empty. Wonder what could have been the reason?

The colour difference on the marble shows how later additions to the grave happened.

I could hear shouting and screaming, so I ,peeked over the fence to see a whole bunch of footballers in brightly coloured vests and clothes. Celebrating life while just over the fence is quiet death.

This was a very nice grave, if I ever had to be buried (not that I want to be …), this kind of understated, simple grave is what I would like. Then again, I will be dead, so who cares?

Two graves, quietly mouldering away on the side.

This was an extraordinary sight. I saw a sundial! and the time was right and it was sunny. It's a sign. I couldn't comprehend why one would want to have a sundial on their grave, but be that as it may, it was quite an interesting talking point. Presumably they could have used it as a signpost? Or was the person buried there a time keeper or a watch maker? I don't know, but found it to be quite extraordinary.

Towards the edges of the cemetery, the graves are much less tended and the gravestones are all over the place.

Many gravestones had Celtic patterns on their stones and Celtic crosses.

Two angels praying over the dead.

Another extraordinary sight. This is a stone pillar with carved ivy leaves or a vine entwining over it, and guess what? There is a real ivy vine growing on it. Spooky or what?

A temporary gravestone while the original has gone for restoration. How curious.

Somebody who was born in India in 1865 and died here in Harrow on 1907. Now there’s an interesting coincidence.

Another broken down grave, but with somebody still remembering them with a bunch of flowers at the base.

A shady grave under a tree.
The small resolutions of the photographs here really do not do justice to the sights, so if you can, do take a look at the full slideshow.

IT Outsourcing Can Actually Increase a Firm's IT Spend

Dr Bhaskar Dasgupta — Sat, 6 Mar 2010 17:40:55 EST

I have learnt the hard way that trying to outsource on the basis of “manage my mess for less” is a sure fire way of crashing and burning at worst and being more expensive at best. Anything that is crucial to your firm’s success, you do not outsource. In other words, only outsource which is a commodity and it is easy to switch suppliers such as perhaps storage management, electricity supplies, sewage, catering, cleaning, etc.

Lo and Behold, here’s a paper which provides some more data to back up the idea that outsourcing actually pushes up your costs. The data used is crucial and I quote:

ITOS and IT spending data were obtained from InformationWeek magazine, a weekly print magazine aimed at business technology professionals. Since 1991, InformationWeek has conducted annual surveys to gather current year IT budgets from a variety of the largest US public and private firms and government entities that use IT. It has supplemented this with firms demonstrating innovative use of IT. In 1999, InformationWeek began asking firms what percentage of their IT spending is outsourced. InformationWeek recently provided the additional firm-level data for the 1998 to 2005 time period for this study with strict disclosure restrictions on the authors precluding the sharing of specific firm responses. Data are used from respondents who provided both IT spending and ITOS information for one or more years between 1999 and 2005. Observations for non-public firms were eliminated and merged with corresponding Compustat financial data to calculate the various control variables shown to affect IT budget levels in Kobelsky et al. (2008b). This reduced the overall sample to 1959 firm-year observations for 647 firms in the period 1999 to 2005

The model comprises of variables:

• itb/sls = firm IT budget for each year per InformationWeek data divided by sales for that year (Compustat data12);

• itos dummy = 1 if IT outsourcing percentage per InformationWeek data is positive in Current Year, 0 if not;

• size = log of Current Year sales;

• ind_conc_ratio = four-firm concentration ratio for four-digit SIC;

• uncertainty = standard deviation of earnings before extraordinary items for previous 5 years scaled by sales;

• rel_divers = related diversification (within 2 digit SICs);

• unrel_divers = unrelated diversification (across 2 digit SICs);

• op_ros = operating return on sales, before depreciation (compustat data13/data12);

• debt_ratio = debt ratio (Compustat data9/data6);

• ave_sales_growth = average sales growth for last two years;

• automate = 1 for firms in automate industries, 0 otherwise;

• transform = 1 for firms in transform industries, 0 otherwise;

• hi_tech = 1 if high-tech firm, 0 otherwise

• lo_tech = 1 if low-tech firm, 0 otherwise.

• year = 1 for each year 2000-2005, 0 otherwise.

90% of the sample companies partake of outsourcing some or all of their IT activities. The authors find that while on a project level, they might see a reduction in the IT costs and spend, on an aggregate firm level, the IT spend actually goes up. Note that they do control for scope and volume changes by looking at the sales growth. Within two years of outsourcing, the IT cost level of firms who have outsourced is correspondingly higher than firms which have not outsourced. While the authors suggest that this is because of capabilities are enhanced, I have my doubts. One cannot improve IT capabilities in 2 years, it is simply not possible to evolve the business and IT side so quickly that a statistically significant improvement in productivity and quality can be observed. It is, in my opinion, clearly aimed at the fact that the business case is frankly wrongly specified and outsourcing doesnt really help as far as cost control is concerned.

Business cases are rarely expressed in terms of ratio’s, in other words, you will very rarely find that the managers concerned or the IT outsourcing firm are quoting you IT costs as a ratio to say the sales revenue or operating costs or profits of the firm. This is why I am very nervous whenever I hear that outsourcing is happening which is going to drive down costs.

There is a good argument to outsource to improve efficiencies, drive a centre of excellence, to improve productivity, but for cost purposes, the figures do not bear out the benefits.

Bhagvata Purana, Skandha 1

Dr Bhaskar Dasgupta — Tue, 2 Mar 2010 22:40:03 EST

I have to admit that I did not even know about this book till somebody told me that the Bhagvata Purana is also known as the fifth veda. I further saw references to this Purana in the Dharmasahastra book by Kane and then figured, it is high time that I actually take a look at this book praised by so many, but not discussed enough. And once I actually got my hands on a couple of copies, I think I figured out why this is relatively obscure (compared to the Vedas, Upanishads, Shruti’s and Smritis). Depending upon the version, the books range from 1500 to 2240 pages in length, containing north of thirteen thousand Sanskrit verses. One needs to be very dedicated or locked up for some serious time to really go through this. Nevertheless it is a beautiful book with lovely tales and I thought of reviewing it, as I really could not find any good reviews elsewhere.

Before I start, first some background and logistical points. I used the following books:
1. The Bhagavata Purana: v. 7 (Ancient Indian Tradition and Mythology) by J.L. Shastri and Ganesh Vasudeo Tagare (1994)
2. Bhagavat Purana by Ramesh Menon (2007)
3. A Study of the Bhagavata Purana or Esoteric Hinduism by Purnendu Narayana Sinha, 1901.
4. Srimad Bhagavata Puranam, Sanskrit, 2004.
5. Bhagavata Puranam, Sanskrit, 2006 (under revision)
6. Srimad Bhagavatam (Bhagavata Purana) by Swami A. C. Bhaktivedanta Prabhupâda.

Quite a lot of the versions are different in formulation, usage of English and the so on. If one wants to be true to the Sanskrit versions (which themselves differ a bit), then the Prabhupada version is good, as it has the original Sanskrit, a word by word translation and a summary. In any case, my knowledge of Sanskrit is barely intermediate and I wouldn't be comfortable in dealing with a review based upon that language based book. Reading Sanskrit is one thing, but reviewing in pure ancient Sanskrit? No Sir. If one wants to have a bit more colloquial English usage and more understanding as per modern usage, then I suggest the Menon version. Rest of them use a bit of archaic English and can be a bit difficult to digest. So this review uses the Menon version.

So how do you review such a monumental book? I was struggling with the answer. I could have reviewed the full book down in one long essay but then this would have missed out on giant parts. Doing a translation is simply out of the question. So after discussing it a bit, I hit upon the idea of writing a summary per Skandha (canto or book) and then highlighting any interesting points that popped up in my mind. This means twelve rather long essays, but I think I can live with that on my conscience that one has done justice to it. If you want to rather get a quick overview of the purana, then the wiki entry is a good place to start. Without further ado, lets crack on.

My first impression after I finished the book was that it was mainly about love, very very intense love. Extremely emotional love. Something that makes you weep uncontrollably. Not bawl, but weep. Not sure if you have experienced this, but it's like none of your emotions (speech, sight, touch, smell…) are able to express it and tears are the only way to do so. I felt like this when I first held my kids in my arms. Or when I used to dance in front of Ma Durga during Durga Puja back home with the Dhunuchis. This book is an expression of very intense love towards Vishnu or his incarnation Krishna. Have you read Rumi? The feeling I got was a bit like what I felt when I read Rumi. Rumi, though, is a bit more earthy and this is a bit more esoteric, although some parts of the purana are quite earthy. It is Bhakti personified.

The purana is roughly dated to between 500 to 1000 AD, but it has gone through so many changes, accretions, embellishments, etc. that it is tough to date it correctly. Plus let us not forget that these are stories and generations of scholars and teachers in a vast land have told these stories in a variety of locales and to a huge number of people. It is a miracle that we actually get to a version in the first place.

The first Skandha introduces the purana, which written by Veda Vyasa, who writes this after completing the vedas and Mahabharat. The main reason behind writing this was that the Vedas and Mahabharat do not satisfactorily deal with the highest goal of knowledge and that is devotion to God (Bhakti). Another reason for for writing it, is to assist us in handling the Kali Yug, which came into being when Krishna died. When people begged him to leave something of him behind so that they can cope with the Kali Yug, Krishna poured his essence into the Bhagwat Purana.

Narada Muni is a key participant in the beginnings of the BP. An interesting story is said about him. Narada is disconsolate, because he is wandering around in Kali Yug and is observing the breakdown of divine order. While wandering on the banks of the Yamuna, he notices a young woman sitting next to two very old sick men, while being surrounded with many other young women. The young woman turns out to be Bhakti and the two old sick men are Gyan (knowledge) and Vairagya (detachment or renunciation). The other young women are the sacred rivers such as Ganga, etc. who are trying to provide comfort to Bhakti. The Kali Yug has devastated her two sons even though it spared her. Narada blesses her by saying that Bhakti will be the only way to salvation and then tries to rescue her two sons by chanting the Vedas and Upanishads in their ears, singing the Bhagvad Gita to them. They improved, but not completely. On beseeching the Lord to provide him with some guidance, a voice from the skies tells him to go speak to certain Munis. On searching and leter finding them, Narada asks the Munis about how to cure the two sons of Bhakti? The Munis state that he has to recite the BP to them and since it contains the essence of Lord Vishnu, it will revive them. So he does and Bhakti and her two sons are also revived.

But this was not the first time that the BP had been recited. Thirty years after Krishna died, Vyasa’s son Suka recited the BP to King Parikshit, grandson of Arjuna, son of Abhimanyu, who succeeded Yudhistra to the throne of Hastinapur. But this story is for later. The second great recitation of the BP happened two hundred years after the Kali Yug had started by Gokarna Muni.

The BP then embarks on a long tale of how a childless Brahman begged for a boon of a child from a Sanyasi. The Sanyasi gives a blessed fruit to him and asks his wife to eat it, keeping a vow of truthfullness, kindness and charity for an entire year, not eating more than one meal per day, and if that is done, then a pure golden hearted pious son will be born. But his wife did not want to ruin her figure or go through the pain of childbirth so she hatched a plan with her sister. The fruit was given over to their cow while her sister’s new born baby was smuggled in to be shown as the Brahman’s son called as Dhundhukari. Three months later, the cow gave birth to a human child with golden skin and eyes like lotus petals, but with cow ears. Hence his name, Gokarna (or Cow Ears). Both grow up together, but Dhundhukari turns out to be a devil in disguise, a disgusting sinner, while Gokarna is pure as the snow on Mount Kailash. The Brahman is at his wits end and Gokarna advices him to cultivate dispassion and renounce the world, which he does. Gokarna also leaves on a pilgrimage. Dhundhukari commits terrible crimes, beats up his own mother, steals, whores and lies and at the end, the whores decide to kill him and they do. Unfortunately, Dhundhukari remains behind on earth after death as a spirit. Gokarna senses Dhundhukari’s death and the fact that he is not truly dead, but is still a tortured spirit. Gokurna performs a shraddha at every holy spot, but it does not release Dhundhukari from the earth and finally he returns to his hometown. Dhundhukari begs him for help to be released and Gokurna then embarks on a deep dhyan (meditation) to Surya Deva (Sun God) to learn how to address this. The Sun God advices him to recite the BP as that is the only way Dhundhukari’s soul will be released. So Gokurna starts the recitation with many many people attending the week’s worth of recitation and when he ends, Dhundhukari is released from his earthly bounds.

The others who were listening, though, do not get their sins washed away. Gokurna is told by the sages that Dhundhukari fasted for seven days and he listened to Gokurna’s recitation with all his faculties and might. This is the reason why Dhundhukari was released and not the others. When the others learnt this, they begged Gokurna to recite the BP again which he did. This allowed all the listeners to also be washed free of their sins by Vishnu who appeared after a great conch shell boom in a blaze of light.

Thus ends the first book. I had to consciously lay aside my erupting cynicism. The first book tries hard to explain why the BP is so important and how it helps to wash away the sins. I thought about self praise? However, as I kept on reading, I realised that I was reading it as perhaps a professor wanting to write a book review and not as a worshipper or a person of faith wanting to learn. That switch was not easy and I found myself slipping back into the cynical, doubting persona many times. The apparent inconsistencies about the origins of the purana bothered me as well till I spoke to my father. He told me, if Vishnu is indeed the world, then how does it matter if one manifestation or another wrote or spoke what? What matters is the content. And that made perfect sense.

What was also a bit frightening for a grown man like me was the underlying concept of letting go. Letting go of everything and with tan, man and dhan (body, mind and wealth) and concentrate on the pursuit of Bhakti, devotion to God. I am not sure if I have achieved that and am very far away from the ideal. It felt quite strange reading about people who can be so dispassionate that they are able to walk away from everything that they hold dear (for me it would be my family, my iPhone, my books, etc.) and devote their all and everything to being in love with Krishna. I am not sure if I can ever do that and it was very humbling to find that I do not have the courage or guts to do so.

What a fascinating journey into a wonderful book which is raising more questions than answering them.

Accountants are High Priests, Drawing Order out of Chaos

Dr Bhaskar Dasgupta — Tue, 2 Mar 2010 02:05:00 EST

Accountants are actually High Priests, drawing order out of chaos.

When I read a paper by Mahmoud Ezzamel on how accounting was performed in Ancient Egypt, I could not suppress a chuckle. Once that was done, it made sense to me. So what is Dr. Ezzamel’s argument? In effect, he is saying that the ancient Egyptians in the New Kingdom (1552-1080BC) had a world view which was defined by the Gods, the Pharaohs, the living and the dead. As long as the relationship between these four parties was established and on track, everything was fine and dandy. It was the scribes (read accountants in modern parlance) who were responsible for making sure that the right numbers of wheat ounces, gold weights, cattle etc. were offered to the Gods by the Pharaohs, and were mentioned in the tombs, etc.

Where does accounting come in? Well, accounting as formally defined is a practise of entering in a visible format, a record of items and actions. There is a value attached to these accounts and a way of capturing them and the definition of these values. In Ancient Egypt, this was inextricably linked with religion. The example of the Eye of Horus story links into this. See the pictorial representation of how fractions ½, ¼, 1/8, etc. break down pictorially in an ordered, descending geometric series.

The philosophical idea behind this, to follow the legend of Horus, is that accountants measure and ascribe value to goods and activities. You might want to think of this as a scale. The higher the value, the closer you are to the God. Another example is the weighing of the heart on Judgement Day as expressed in this papyrus image:

Again, you can see how the measurement of gifts, offerings, actions, activities in real life translate in a measurable manner to link the living with the dead and combining this with the Gods (see the Gods in the centre) and the Pharaoh(who is sitting on the far right). Measurement is the word which is crucial in this case, as it was the scribes, (the accountants) who would judge the value of the offerings made to the gods. And if the scales would not balance, then the jackal headed god will swallow the heart. I dare not say what is the modern day equivalent of what happens if our balance sheet or accounts do not balance, but I am sure you can think of people like regulators and auditors who will eat your figurative heart if this happens.

Temple walls from Ancient Egypt and papyri, etc. were full of lists and values of offerings made to the Gods, portions offered to the ancestors or kept aside for offerings in case of your own death, and portions offered to the Pharaoh. There was a very complex set of definitions which ruled over these offerings. Reading them made me feel that I am reading a GAAP or IAS manual of modern times.

Here is a scene from a tomb which explained precisely what was being offered.

This is an interesting philosophical point. Accountants actually draw order out of chaos, allow measurement to happen and frankly are perhaps indeed the high priests of order in our society. So if somebody says that they are boring, they are boring in the sense that the skeleton in our bodies is boring, but without it, we will just be a pool of skin and fluids.

Order and accounting as a performative ritual: Evidence from ancient Egypt by Mahmoud Ezzamel published in Accounting, Organizations and Society 34 (2009) 348–380

Photo Essay: Saint George and the Dragon

Dr Bhaskar Dasgupta — Sat, 27 Feb 2010 17:16:16 EST

While tagging along with the family while they were out shopping in the St. Georges mall. (I am the official luggage and wallet carrier), I happened to glance up.

About 20 feet up, there are these panels on the side. Very curious, I never noticed them before. I mean, you usually don't go about noticing stuff which is way over your head like that…specially when the mall corridors are crowded and you need to watch where you are going, where your bags are going, where your squirmy little girl is off to and where your ashamedtobewithembarassingparents teenage boy is slouching off to.

First of all, the panels reminded me of the carbonite panel in Star Wars when Captain Han Solo gets frozen into this block. Anyway, the panels describe the story of how St. George defeated the dragon.

The story goes as follows:. A dragon has made its nest near a stream and for the townspeople to get water, they have to provide a human sacrifice to the dragon. Here you see on the left that the dragon has got one of the human sacrifices and then on the right, it's playing with the meal.

One day, it was the turn of a princess (who is very strangely wearing a modern mid thigh dress???!!!) who was tied up to be the dragon’s lunch. On the left panel, you can see our man, St. George, getting all excited and coming closer and closer in the right panel to rescue the princess.

There is an almighty fight between the dragon and St. George, while the princess is sitting as if she is at the dentist’s. A big battle takes place.

Then the dragon is conquered, the king is suitably grateful and then converts from being a pagan into a grateful Christian. Check out the wiki entry here, the story behind this legend is enormously fascinating. Full slideshow.

The Robin Hood Tax - A Crock of Brown Organic Matter

Dr Bhaskar Dasgupta — Wed, 24 Feb 2010 17:04:37 EST

Look at the Robin Hood Tax website. See the main statement:

This tax on banks – not you or I - has the power to raise hundreds of billions every year. It could give a vital boost to the NHS, our schools, and the fight against child poverty in the UK – as well as tackling poverty and climate change around the world.

Let's unpack this, shall we? And in the interests of disclosure, I am a banker and I am talking about this in my personal capacity, nothing to do with my current or past employers.

Thisis tax on banks, not you and I. Banks obviously live on another planet. So that taxes on banks have no impact on you and I. Here’s the first example that the authors don't know their head from their toes. Banks are intermediaries between you and I, who place deposits and it is you and I, who take loans to purchase a house or buy a pension. When you place a tax on the intermediary, you are reducing the interest rate that I get paid as a saver and increase the interest rate that I have to pay to get a house. See the economic illiteracy of not understanding how basic financial and economics work?

Secondly, why are they claiming to have big power to raise hundreds of billions every year? I mean, that is a silly statement, Why not raise trillions by imposing 100% tax on all earnings? You will raise even more. What’s the point of this silly statement?

Thirdly, give a vital boost to the National Health Service. Very good. Why? What happened to the taxes that you already levy on us? Is that not enough? Obviously it is not enough. So why don't you boost that tax? Oh!!!!!, let me see if I understand. You do not like to boost income tax, because somebody might get pissed off enough to fly the plane into the tax building or throw out the blood sucking people out of government. There is a word for this, Stealth Tax.

Fourthly, haven't you realised that the UK public sector is already showing a debt of 56% of the GDP and could reach 93% in 4 years? Instead of taxing more, shouldn't you be thinking about reducing spending? How about the fact that more than 2/3rds of the 1.2 million extra jobs created in the UK cities were in public administration, education and health. Don't you think this is a tad top heavy? And then you want to impose a tax on savers, job creators and intermediaries to increase the number of jobs even more? Same thing applies to school funding. Oh, fight against child poverty!

Then they obviously throw in poverty and climate change as well. I think they missed out making apple pies for pensioners, helping lollipop ladies with better shiny vests and feeding nuts to squirrels!!!

And this is a highly regressive tax, which will proportionally impact the poor even more than the rich. For example, if this applies to all financial transactions, then a poor man will have to pay 1 pound in tax (for example) for every 10 quid he withdraws, versus say a 100 quid for a richer man who withdraws 1000 quid. When you are faced with the choice of eating beans on toast, then that 1 pound makes more of an impact than the 100 quid when you are eating caviar and drinking champagne. So this tax is actually going to exacerbate poverty.

Finally, if you say that taxes help improve behaviour of the banks, then why don't we start imposing taxes on government departments who do not perform? How about imposing taxes on train companies whose trains are late? How about charities who spend more than say 5% on administration and marketing? Talking about charities. Here is a list of charities who have signed up to this interesting idea. Charities are supposed to rely on the philanthropy of ordinary people. They rely on the good nature of people who contribute towards society. But this bunch of charities are asking for forcible contributions. In other words, they are demanding, under force of law, for everybody to contribute to them. This is theft!

Robin Hood, after all, was a thief and a robber. And for all his noble efforts, his thefts effectively lead to the authorities actually increasing the amount of taxes levied on the common man. In this particular case, if you increase the level of taxes, then you are in effect increasing the public sector and then you will need more taxes to support them in the end, leading to the public sector taxing itself to spend on itself, a snake eating its own tail.

Also look at the list, quite a lot of unions are in there, and most of them are public sector unions. Hmmm, very good indeed, I like the way you want me as a taxpayer to give you more money so that you can have more employees. And the churches got into the act as well, thank you for robbing us! Robin Hood also robbed the public authorities and churches who were grasping, thieving, robbing clerics. It’s nice to see that they haven't changed a wee bit. So I like how confused they are by saying that they are like Robin Hood, when they are exactly like the enemies of Robin Hood. How about charities also paying tax then on their earnings? Oh? What you get are gifts, unlike us money grabbing taxpayers who get our money after squeezing just whom? We earn our money and you are asking the government to tax us and then you will come to us again for more money. Money grubbing and theft combined with chutzpah and hypocrisy.

Then they say this is only going to be applied to speculative banking transactions. Just how they will define speculative is unclear. Will this involve people who take out mortgages for buy to let? Or how about me taking out money from my bank account to buy shares? How about taking out money from my bank account to speculate on horses? No? Yes? What?

This really bugged me. I don't mind paying taxes because we get services in return. But to go about actively proposing taxes without making the case for it reminds me of the Boston Tea Party. And when people think that they are being unfairly taxed, they start protesting or committing suicide bombing terrorism. So here we have a campaign, they don't know what it is for, they don't know what previous tax amounts were used for, they don't know how it will be applied, they dont know what the implications will be, they don't know who will get charged, but everybody is having a big song and dance about it.

Photo Essay: Liverpool Street Station

Dr Bhaskar Dasgupta — Sat, 20 Feb 2010 20:33:18 EST

On a dull day, I went off to take some photographs of some lesser known iconic places in London such as train stations. Where best to start other than Liverpool Street? I love trains and yes, being a train driver was one of my boyhood dreams and yes, I am a nerd still. There is something romantic about train stations, something that is evocative of emotions, people arriving and people leaving. Very very evocative and emotional indeed. I guess that is the reason why train stations are so frequently used as film locations for “major scenes”.

As it so happens, Liverpool Street was used as the setting in many films as well, the one which I remember is Mission Impossible. And of course, its on the London monopoly board as well. I will be going around over the next few months and years and doing the same with Marylebone Station, Fenchurch Street Station and Kings Cross Station.

Anyway, my first sight as I was coming out of the station wasn't impressive. Interesting pair of tights, eh? But lets get to the main theme.

Here’s the entrance from Liverpool Street. There are other entrances as well, but this is the main one so to say. Well, main as in having the “taxi hanging around the place” entrance.

The railings show that the place was owned by the Great Eastern Railway way back in 1874. Pretty neat, eh?

Here’s my previous blog post about it.

The plaque…

The architecture is suitably impressive.

And not just bricks and mortar, even on the ironmongery. Very detailed work.

The concourse. This is where the flash mobs congregate. Here’s a commercial which was filmed here.

Check out the freeze flash mob example here. Tons of other videos here. Its a good place to do this as you have a large enough space for the mobs to congregate, good transport links and then a walk way around the space to film and observe.

And a hotel sign with another sign of that lovely restaurant, MacDonald's.

A reverse angle view of the concourse. You can see the entrance to the underground in the far end.

The walkway around the station.

From the ground floor. The full slide show with slightly bigger resolution is here.