2008 Oct 22

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Exclusive Lehman Down, down and out! -Page4

THE SCHOLARS’ AVENUE O CTOBER 22 2008

Fading Away

Formula SAE in KGP!

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ormula SAE is one of the world's most popular and challenging engineering student design competitions. FSAE requires a team of undergraduate students to build a prototypical Formulastyle race car from ground up in a year long process that

culminates in the FSAE events held round the year. While IITM has plans to compete in FSAE Australasia later this year, IITD and IITB have participated the US version of the same in Michigan. Delhi College of Engineering(DCE) has participated in the UK version. The race car is evaluated on its performance in the design, manufacturing cost, endurance, fuel economy and autocross racing events, with awards for each category. Now, a group of enthusiastic 3rd year students of the Mechanical Engineering Department are planning to put KGP on the racetrack as well. A team is being formed keeping FSAE 2009 in mind. Apart from designing the car for the event, the team also plans to conduct regular workshops. The D i r e c t o r, P r o f . D a m o d a r Acharya has promised assistance from the institute. Interested students, especially the 1st and 2nd years, are advised to keep an eye for notices regarding team member selections. Details of the event c a n b e f o u n d a t http://students.sae.org/competi tions/formulaseries/

IIT K HARAGPUR

From the Editorial Board

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t the time of writing this article, the spectacle that was Illumination has been expunged from the average KGPian's calendar. Considering the scale, tempo and fervor that accompanied the competition in its glory years, the fading out of this competition seems almost anti climactic. As is probably justified with an event of this magnitude being consigned to the pages of history, there have been mixed reactions and strong opinions from all quarters. Throughout its l i f e t i m e , Illumination has been an epitome of teamwork, testament to what a group of students working nights on end can achieve. To have it ripped away from the campus, whatever the reasons, leaves a bad taste. Perhaps we should take this opportunity to look back and reflect on the events that led us to this juncture. The sequence of events is vague, and if we dig deep and analyze, it seems hard to determine where and why exactly it all began. Irrespective of that, the question we need to ask ourselves at this point is "Why now?" Why are the shouts against Illumination louder and more cohesive than ever? It is because we finally have realized that unless we stand up and shout, no one will hear us. The mindset on campus is not against Illumination as much as it is a protest against the curbs on our freedom. Something that we students took for granted has

been taken away from us, and we don't like it. Trust and transparency in the student-administration relationship was something we all wished for. The open session with the Dean was a first step. We need many more, if there is to be any hope of rescuing ourselves from the state we are in. Leaky toilets, over stuffed halls of residence, non existent medical facilities, an archaic

bureaucracy, local gundas barging into halls; all these are realities that we, as students of the premier science and technology institution in the country, have to contend with. Coupled with an administration that, so far, was seemingly blissfully unaware of the part it had to play in creating and maintaining relationships with students, we seemingly had reached the nadir. Post the open session, do we see light at the end of the tunnel? Given past experience, it would be all too easy to put all that was said at the meeting aside as empty promises, but we hope otherwise, both for the students' sake and the institute's. We deserve a reactive

Is not holding Illumination justified? Here’s what you have to say.

Tushar Kumar There are more pressing issues at hand that require money and man-hours than Illu. Resources should be guided into those, which include, among others, poor living conditions and unhygienic food.

administration, one that is more sensitive to the needs of the students, and one that realizes that the actions of a minority do not dictate the mentality of the majority. If the campus has to change, then we want it to change for the better. We need action, and we need it now. Could all this have been avoided? Seemingly a rhetorical question, but the student unrest that we see now, the discontent at all the things which are not right on campus, was bound to surface some time or the other. There's only so many frogs in sambhar and snakes in hostels that some of us can stomach, and only so many wrong prescriptions that we are willing to risk our lives over. The 11 pm rule and events following it, combined with a sense that the students were being kept out of the loop, was the flash that was needed. Make no mistake; this is a turning point in our Institute's chequered history. We are in a period of transition. Or so we are told. Change is afoot on campus. We are told to bear with it, and watch as 50 years of tradition and spirit crumbles around us. Are these ruins of our own making? As is common with occurrences of this magnitude, neither the administration nor the students can claim to be without fault. Whatever be the outcome, one thing is for sure. These are no longer the best days of our lives.

Have your say @ iitkgp.minekey.com

Satyajit Sahu Not everything in life can be measured in terms of wastage of resources. Illu is an integral part of a KGPian's life, even decades after he has left the hall corridors. It's beyond measurement.

Delip Andra (Class of 1994) Illu has a special place in every KGPians heart and something that brings the residents of a hall together to compete with the rest of the halls, fosters interaction, creativity, social skill and competitive nature which is what KGPians are all about. I would be disheartened if ILLU is being discontinued.

T S ’A ² W , O 22 2008 NEWS AVENUE 2 Inter IIT The Alumni Cell: Where Students Reach Aquatics Out To Ex-students HE

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magine yourself, ten years into the future, an illustrious alumnus of the Institute. If campus news were to reach you, wouldn't you rather it was from your perspective - the perspective of a student? A student group working with the Office of Dean, Alumni Affairs to bring the Alumni closer to the Institute was on the cards for quite some time now. Under the guidance of Prof. Amit Patra, and with the help of a few fifth year students the concept, objective and goals of the team were laid out. The involvement of students in organization of the Convocation and Alumni Meet in the past, along with the success of the students' placement committee gave support to the idea that students can be entrusted with the responsibility to represent the Institute. At present the cell consists of undergraduate students from fifth to second year, which includes the VP, Gymkhana. The members are divided into three

specific teams, namely the Literary Team for regular communication with the Alumni, the Networking Team to work on improving the Alumni Database and to keep them updated about new Institute Initiatives and the Action Team which shall help conceptualize and organize the Alumni Meet and the Convocation ceremony. The Cell aims to keep the Alumni informed of all student initiatives, Institute announcements, and also plans to provide an insight into student potential and achievements. This being the first year, the team has the extra responsibility of chalking out a plan to facilitate a procedure which can absorb ideas for further improvement in future. The team's work is currently focused on the website, which is expected to be up and running in a week's time. Most of the work for the final website has been handled by the students, including the structure, design, features and coding. Coming up

CHOLARS

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with a networking website with the necessary features and functionalities, with no reference to fall back on, is a huge challenge. However, help and support from the Dean's side has led the team to achieve good progress. The Cell endeavours to create a strong rapport with the alumni, so that both the Alumni and the Institute may reap numerous benefits of working t o g e t h e r. A m o n g m a n y possibilities, the Cell may in future work towards securing internships for students. A large section of the Institute's alumni being entrepreneurs, the Cell, if s u c c e ss f u l , m a y g r o w t o supplement the Training and Placement section, though never supplant it in matter of internships. However, this is not among the primary aims concerning the Cell at present. As we look forward to the upcoming website and other activities here's wishing The Alumni Cell all success in its attempt to bridge the gap between (ex)IITians and their Institute.

Revolting Labour Boycott

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he Rani Laxmi Bai hall of residence, in its toddler years, witnessed its first major controversy on the 29th of September with a protest staged by the CITU and the AICTU, the respective trade union wings of the CPI and CPM. The bone of contention was apparently the exploitation of mess workers employed in the private messes. In our previous issue (The Case of the Dead Frog, Sept. 21, 2008), we spoke of the HMC's decision to hand over mess responsibilities to private

GC Update

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he Sports GC for the session 2008-09 kicked off with RP comfortably clinching the gold in aquatics, followed by Patel b a g g i n g t h e Ta b l e Tennis gold. Patel and RP are jointly leading the GC with 10 points each, closely followed by LLR and Nehru with 6 points apiece. The Inter Hall Sports GC for girls, which was scheduled to start on the 14th of September, has been postponed to the next semester.

contractors and we had given sufficient indication of dissatisfaction brewing within the labour class and directed against the privatization. We caught up with one of the agitators, who also happened to be a retired General Secretary of the worker's union of IIT Kharagpur. The outsourcing had a certain precondition attached to it. As per the West Bengal Labour Commission's requirements, no worker is supposed to work beyond an 8hour shift and the wages per day are fixed at Rs. 114. Simple terms and conditions - no complications! Allegedly the mess contractor collected the signatures of the mess workers on a blank sheet and then, with the agreement that the preconditions were adequately met, he handed it over to the authorities. The workers were supposedly paid much less than the prescribed rate and were subjected to strenuously high work hours. Those who refused to sign up were denied their due salaries by the mess contractor. Just prior to the Durga Puja vacation, the workers

assembled before the mess manager's office demanding t h e i r t h r e e m o n t h s ' p a y, supplemented by a bonus for the festive season. A blunt refusal to meet their demands sparked off this demonstration. The situation got violent when one female mess worker, who dropped her stand of solidarity with the other protestors, was beaten up by her agitated colleagues and subsequently hospitalized. The police immediately entered into the scene to prevent further mishaps. Their attempts at a peaceful settlement by arranging for a meeting between the two parties were however let down by the mess contractor who did not turn up. An ad-hoc arrangement with Gokhale mess attended to the food requirements of the residents of RLB hall during the worker's strike which lasted until the Puja vacations. Apparently, the aggrieved parties have reached a mutual agreement during the holidays subsequent to which the mess is functional again.

EDNESDAY

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he 44th Inter-IIT Sports Meet took off with Aquatics and Water Polo events from the 6th to the 9th of October. IIT Madras was vested with the responsibility of organizing the meet out of turn to coincide with its Golden Jubilee Celebrations. The first stage of the event however concluded on a sore note for the KGP contingent as they swallowed the visibly dismal results compared to a splendid performance in the preceding year. Chirag Fialoke was restricted to 5 individual events (in which he scored a whopping 3 golds and 2 silvers) due to the imposition of a new rule, which proved to be a bane for Kharagpur. The 9-1 and 10-2 drubbing at the hands of IIT Kanpur and Bombay respectively in the Water-Polo event revealed the sordid tale of an inexperienced contingent and highlighted necessity of better coaches and training standards.

Institute Bus A welcome move to provide students free transport to the railway station before and after the holiday period was initiated during the past Autumn Break by the Institute. The Registrar Dr D Gunasekaran immediately approved the use of two Institute buses for the purpose when requested by the VP, Public Affairs Chair and the UG Representative. The hourly to and fro pick-up facility expected to become a regular provision in future not only ensures safe travel to the station at odd hours but also saves students from the exorbitant fares charged by the local taxis.

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O NLINE N EWS To read these articles online and to give your feedback on them, please visit o u r w e b s i t e a t www.scholarsavenue.org. The website provides the latest campus news through our coverage of events as they happen. Send letters to the editor at: [email protected]

T EAM S CHOLSAVE Anuj Dayal, Arish Executive Editors ? Inam, Robin Anil, Sheekha Verma, Sreeja Nag, Suvrat Bafna Editors ? Anup Bishnoi, Deepak Cherian, JS Deepthi, Mithun Madhusudan, Pranesh Chaudhary, Srinath Sinha, Vinayak Pathak Asst. Editors ? AVN Murthy, Bharat Bhat, Dheeraj Golla, Mayank Kedia, Pallavi Jayannavar, Siddharth Prabhu, Siddharth Singh, Suyash Bire Reporters ? Abhirajika A, Amiya Adwitiya,Arvind Sowmyan, Chidambaram A, Ratan J S, Tiyasa Mitra, Vijay, Sumeet Mohanty

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² W E D N E S D A Y , O C T O B E R 22 N D 2008

3

SINGUR : A Wake-up Call

KGP

Singur

“I am telling my workers — you have to change. If you fail to change, your company may fail." "We are not fools to ignore the changes taking place in the World". Quotes from a pro-reform Left front Chief Minister signaling a change on the horizon for West Bengal.

The 30 year old Marxist Government finally seemed to have woken up to the changed dynamics of a globalized world. The change was all the more visible when Mr. Ratan Tata announced the setting up of a small car factory at Singur the very day Mr. Buddhadeb Bhattacharya was sworn in as Chief Minister on 18th May, 2006. With a SEZ at Nandigram also planned, Mr. Bhattacharya looked set to change the image of West Bengal into an investor-friendly one. Presently, Tata motors has pulled out of Singur forsaking its Rs. 1500 Crore investment. The Government has accepted

In the eyes of the law While Singur is a particular case in point, land acquisition has n e ve r b e e n e a s y f o r t h e Government. The Land Acquisition Act, formulated by the British way back in 1894 was adapted in more or less the same for after Independence and enables the state to expropriate any private property forcefully for 'public purpose', with due monetary compensation to the owners. The underlying logic lies in the principles of Utilitarianism and the consideration of community welfare over an individual's right to property. Unfortunately, the law is inherently imperialistic and successive Governments have only worsened matters by taking full advantage of the ambiguity of the 'Public Purpose' clause. Whenever conflicts with the judiciary arose (See Box, R. L. Aurora vs. State of U.P, 1962), the Govt. brought about amendments (1962 and 1984) which only strengthened its arm. The term ‘Public Purpose’ was

“The

Land Acquisition Act did not contemplate that the Government should be made a general agent for companies to acquire lands for them for their private profit” - Supreme Court expanded to include “companies that are engaged in or are planning to engage in any industry or work for public purpose''. With this, the state could virtually classify any acquisition of land to be in public interest. Since then, the courts have been indecisive on the issue, with one judgement ruling that 'The Government is the best judge in deciding whether acquisition is for a public purpose or not'

Nandigram as a failed case of forced land acquisition; with a dented image not just in the eyes of the industry but also the workers and farmers whom it claims to represent. So what went wrong? The proposed 997 acres for the Tata small car plant was mostly fertile, multi-crop land, located in one of the most a g r i c u l t u r a l l y p r o d u c t i ve r e g i o n s o f We s t B e n g a l . Unwilling farmers standing to lose their only source of income naturally erupted in protest and the state's ill-preparedness was clear in the inept handling of the

crisis. The Government resorted to brute force to quell protests , involving both the state police and CPI (M) cadres to coerce people into accepting the compensation package offered. Although forcible acquisition of land for a ‘public purpose’ is the state’s legal right under the Land Acquisition Act (See Land Acquisition - A Legal Perspective), there were two major issues on which the Govt. was caught on the wrong foot. (See Box) These let Ms. Mamata Banerjee to creep in and the communists ironically found themselves fighting on the side of a capitalist business house. The agitation claimed its

Compensation Package The initial compensation package was fixed as follows: 1. Rs. 8.70 Lakhs per Acre for the mono crop land 2. Rs. 12.76 Lakhs per Acre for the multi-crop land. This Rs. 12.76 Lakhs, if put in a Fixed deposit at the current rate of interest, would earn Rs. 9,750 per month, ignoring inflation, which comfortably exceeds the income from any multi-crop land. The return drops to nearly Rs. 3,000 per month if inflation is accounted at the rate of 6%. Such compensation also neglected the expected increase in the value of the land post development. Most of the small farmers are poorly skilled and the absence of a rehabilitation package meant that unemployment was a very real prospect for most of them.

Cost of wooing the Tatas The enormous subsidies and incentives provided by the state Govt. has raised several eyebrows. A Rs. 200 crore loan at 1% rate of interest, VAT proceedings being handed back to the company as loan, Rs. 130 crore as compensation to farmers; all add up to a straightforward subsidy of Rs. 12 crore a year on the land purchase. These benefits are required to support the Nano project. But is the state justified in using tax payer money for offering these enormous benefits to a private venture?

What needs to be done? The basic question of SEZs on prime agricultural land still remains unanswered. The Standing Committee on Commerce in its report on The Functioning of Special Economic Zones in June 2007 recommended the use of only waste barren land for SEZs; to use single-crop, rain-fed land in unavoidable situations and to ban altogether the use of multicrop, irrigated land. None of these have found any mention in the amendment bill, an oversight that is too glaring to ignore. Industrialists cannot be blamed for willing their factories to be placed at wellconnected places with abundant resources. It is the Government's responsibility to provide the necessary infrastructure to make it viable for SEZs to be set up on wastelands such as the Thar Desert. Russia's Siberian industrialization (without the

slave labour) and the Shenzhen SEZ (set up on coastal wasteland) are the paths to follow. The Government's callous approach towards basic infrastructural development is the major reason for the failure of the SEZ model in India, as opposed to its success in China. The people affected too have to be taken into account. Slogans like “China was yesterday, India is today” will only remain the empty rhetoric that they are unless the present primeval outlook changes. The corporate world, by itself needs to follow the example of visionary industrialist J R D Tata, who had the courage to set up base in a barren land and convert it into the sparkling, welladministered city of Jamshedpur. India needs more of such visionaries. Let's hope there are more.

victims, the most horrific being the rape and killing of an 18 year old girl inside the factory premises. The culmination of these events was the 'gherao' of the factory which forced the Tatas to pull the plug. The recent events are too fresh to be reiterated here.

The SEZ Question In an overzealous drive to copy China's Special Economic Zones (SEZs) model, more than 500 SEZs have been sanctioned covering around 500,000 acres in total. This has meant widespread acquisition of prime agricultural land for both public and private sector enterprises, often with meagre compensation and no rehabilitation. Small farmers have been the worst hit, with the land going in huge chunks to big corporate houses, a reversal of the Land Reforms era. Singur and Nandigram were only waiting to happen. è Where should the line be drawn

between public good and private profit? è Should land acquisition solely be the responsibility of corporate houses or is state intervention necessary? è Who does the state bear greater responsibility towards– the farmers who stand to lose their livelihood or the private developers?

The Government seems to have woken up to some of these concerns, going by the provisions of the Land Acquisition Amendment Bill 2007. 'Public Purpose' is redefined to include only defense purposes and infrastructure projects. The Government can now acquire land for private companies only if 70% of the required land has already been obtained by the company through direct negotiation with the land owners. The Rehabilitation and Resettlement Bill 2007 has also been simultaneously tabled which provides for better compensation packages for tribals, forest dwellers and land tenants taking into account the intended use, future value of land and a social impact assessment. Alternative employment and not compensation is the key issue here as simply handing out a lump sum of money does not serve the purpose. The old adage about teaching a person to fish rather than giving him a fish holds. Companies and the Government should ensure that all displaced people are given sufficient training to make a living.

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² W E D N E S D A Y , O C T O B E R 22 N D

Liquidity : An asset's ability to be quickly converted, through trade, into cash incurring a minimum loss in the process.

Investment banks : Banks that profit from issuing and selling securities in the capital markets as well as providing advisory services to investors, facilitating mergers and acquisitions and corporate restructuring. Unlike traditional banks, they neither accept deposits nor provide loans. Mortgage : A mortgage is the pledging of a property to a lender as a security for a mortgage loan.

Foreclosure : The legal process by which a borrower in default under a mortgage is deprived of his/her interest in the mortgaged property.

What are the reasons behind the collapse of financial institutions like Lehman Brothers?

Economic Bubble : High volume trade at prices that are considerably different from intrinsic values, culminating into a sudden, drastic drop in prices called as a bubble burst. Ex: The Dot Com Bubble (2000) Subprime Lending : Lending money to subprime borrowers, who are associated with a higher risk of defaulting, where the risk pays off in terms of higher chargeable interest rates on subprime loans. Subprime Crisis : An ongoing economic problem characterized by contracted liquidity in the global credit markets and banking system, the U.S. Housing Bubble, risky lending and borrowing practices. Chapter 11 : A chapter of the United States Bankruptcy Code, which permits reorganization under the bankruptcy laws of the United States. A Chapter 11 filing is usually an attempt to stay in business while a bankruptcy court supervises the "reorganization" of the company's contractual and debt obligations.

1968

Federal Home Loan Mortgage Corporation (Freddie Mac) is created, as a GSE, to buy and pool mortgages on the secondary market, then sell them as mortgagebacked securities to investors in the open market.

The Federal National Mortgage Association (Fannie Mae) is made a s t a n d - a l o n e G o v e r n m e n t sponsored enterprise (GSE) - purchases and securitizes mortgages to facilitate liquidity in the primary mortgage market.

1970

US Federal Reserve lowers Federal interest rates 11 times, from 6.5% (May 2000) to 1.75% (December 2001), creating an easy-credit environment.

2003

increase in the price of homes would be much more than the interest that they would pay. Cheap loans fueled the demand for homes, which sent real estate prices through the roof. As greed inevitably took over, banks and financial Institutions decided to offer loans even to the less credit worthy people, known as subprime borrowers, wanting to buy homes. In order to mitigate their risk in these bad-credit loans, they bundled similar risk loans, split the bundle into small units (like shares) and then sold these securitized loans to buyers. The incentive on these loans was that they offered higher return than any other investment at that time. A vicious cycle was born as the investors who bought these securitized loans actually borrowed money from some other Bank or financial institution to invest more and get higher yield. This is called leverage. Meanwhile, the Fed began to raise interest rates. This meant that the EMIs or Equated Monthly Installments started to increase. As these increased, the subprime borrowers not able to pay the higher EMIs started selling their houses to repay loans. This led to a sudden selling pressure in the housing market, resulting in crash of house rates. As the housing market crashed, the sub-prime borrowers defaulted and were not able to return the money to the banks. The Banks were not able to give returns to the investors, who in turn, were not able to repay the loans that they had taken from other institutions to buy these loans. This cascade of events resulted in the collapse of the financial institutions.

The current problem of US financial institutions collapsing has its seeds in the sub-prime crisis. Back in the 2000's during the dotcom bubble burst, the Fed, i.e. the central bank of the United States started to decrease the interest rates to promote borrowings by individuals and corporations. The idea was this: low interest rates encourage people to borrow and spend more. This fuels the demand for goods and services in the country, which in turn, results in a growing economy. The corporations are also encouraged to invest in more projects as the cost of capital becomes cheaper due to cheaper debt. Hence, more projects have positive Net Present Value (NPV). Low interest rates did achieve the desired objective. The US economy continued to r. Nupur Bang is a Professor at the ICFAI grow, but it was fueling a Business School, Hyderabad as well as a bubble elsewhere. Low member of ACCA(UK). The Scholars’ Avenue interest rates pushed caught up with her and she agreed to provide us Americans to borrow with helpful insights into the financial epidemic money to buy homes. With that not only has the U.S, but also the world interest rates as low as 1%, economy in its grasp. they were certain that the

Early 2005: Arizona, California, Florida, Hawaii, and Nevada record price increases in excess of 25% per year. Fall 2005: A booming housing market halts abruptly.

2004

2005

U.S. home ownership rate peaks at 69.2%. Securities Exchange Commission effectively suspends net capital rule for Goldman Sachs, Merrill Lynch, Lehman Brothers, Bear Stearns and Morgan Stanley. Freed from government-imposed limits on debt they can assume, they leveraged up 20, 30 and even 40 to 1

Feb–March: Subprime market collapses; more than 25 subprime lenders declare bankruptcy, announce significant losses, or arrange to be bought out.

May 30: JPMorgan Chase completes its acquisition of Bear Stearns.

Early 2008

Sept 7: Mortgage lenders Fannie Mae and Freddie Mac a r e p l a c e d i n t o conservatorship – effectively nationalization.

September 2008

May 2008

2007 Aug 22: Lehman Brothers announces exit plans from the subprime mortgage business, eliminating 1,200 jobs.

July 2008

January 24: The National Association of Realtors announces that 2007 had the largest drop in existing home sales in 25 years, and the first price decline in many years, possibly going back to the Great Depression.

D. Low interest loans are extended to people with high risk of default (subprime borrowers) rapidly increasing the demand for homes and other realestate assets. E. Housing prices skyrocket. F. People borrow more money to purchase homes far more expensive than their ability to meet their mortgage obligations. G. Federal Reserve excercise monetary contraction policy. H. Adjustable Rate Mortgages (ARMs) reach much higher rates than initially advertised. I. Home owners begin defaulting on their mortgages and foreclosure kicks in. G. Housing Bubble bursts and prices come crashing down. H. Firms that invested billions in Real Estate, declare bankruptcy.

In the next issue, we will explore how this global financial meltdown affects the whole spectrum of industry - who's safe and who's not. Also, a Guest Article about the possible future options for those who planned on entering finance in the near future. A gist of what the slowdown means for those of us looking out for jobs this year. Watch this space next issue !

Sept 5: The United States Department of Labor reports unemployment rate at 6.1%, the highest in five years.

May 16: Lehman Brothers cuts 1,400 jobs, about 5% of its work force.

C. Low mortgage rates causes borrowing and lending to explode, particularly in real estate.

Coming Up

D

Federal Reserve Chair Alan Greenspan lowers Federal Reserve's key interest rate to 1%, the lowest in 45 years.

2000 2001

A. Federal Reserve cuts interest rates to as low as 1%. B. As a result, mortgage rates falls to an all time low.

Ø Lehman Brothers, the fourth largest investment bank in the U.S collapses. Ø Merrill Lynch, on the verge of bankruptcy, sells itself to Bank of America. Ø Freddie Mac and Fannie Mae were nationalised by the US government. Ø AIG, the largest insurance company in the world, is given a $85 billion loan from the Federal Reserve. These events are those that led the world to sit up and take notice of the crisis facing the global economy today.

Solvency : Ability of a business to cover its liabilities by selling assets when creditors demand payment, with the liquidity of the assets determining the amounts of losses.

5

The BIG Picture

The Scholars’ Avenue explains the global financial meltdown in layman terms

Defaulting : When the borrower is found to be in violation of the legal obligations according to the debt contract.

Bank Run : When a large number of depositors withdraw their money from the bank in the belief of perceived/actual financial instability of the bank, leading, at worst, to a bankruptcy.

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² W E D N E S D A Y , O C T O B E R 22 N D

Lehman : What and Why?

Glossary Debt Security : A document that evidences the issuer's promise to repay the principal at face value on maturity, indicating an obligation on his/her part.

THE SCHOLARS’ AVENUE

July 11: IndyMac, the largest mortgage lender in the US is seized by federal regulators.

Sept 13-14: Lehman Brothers files for bankruptcy. Sept 14: Bank of America announces plans to (and eventually does) buy Merrill Lynch. Sept 17: Federal Reserve is bails out AIG with a $85 billion bridge loan in exchange for 80% equity stake in the insurance firm, effectively nationalizing it.

Sept 20: George Bush asks Congress for authority to spend nearly $700 billion to purchase troubled mortgage assets and contain the financial crisis. Meanwhile, a $1.35 billion (£700 million) plan for Barclays Capital to acquire the core business of Lehman Brothers in the US is approved.

October 6-10: Worst week for the stock market in 75 years. The Dow Jones lost 22.1 percent, its worst week on record, down 40.3 percent since reaching a record high of 14,164.53. In India, ICICI closes at Rs.326 in the BSE down from its 52-week high of Rs.1465. DLF touches an all time low of Rs. 279.10.

Sept 22: Morgan Stanley and Goldman Sachs convert themselves into lower risk, tightly regulated commercial banks. Sept 25: Washington Mutual Savings Bank is seized from Washington Mutual Inc., placed in the receivership of the Federal Deposit Insurance Corporation (FDIC), which sells the banking business to JPMorgan Chase for $1.9 billion.

Oct 2008

6

TECH AVENUE

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² W E D N E S D A Y , O C T O B E R 22 N D 2008

Research on Campus Content Aware Image Resizing “Okay, well, Charles, you are a mathematician, you're always looking for the elegant solution. Human behavior is rarely, if ever, elegant. The universe is full of these odd bumps and twists. You know, perhaps you need to make your equation less elegant, more complicated; less precise, more descriptive. It's not going to be as pretty, but it might work a little bit better.” Larry Fleinhardt, in “Numb3rs”

W

hat is pattern? To the businessman, a plot of the SENSEX is a pattern in the forthcoming share prices. To a mathematician, the same plot is a part of a polynomial curve. Consider a case, when you are given an image and told to point out the portions you find important. Different people will consider different parts of the image to be important. On an average though, most people will have identify at least one portion in common. For example, if the image contains Bill Gates in it; to people who know Bill Gates, that portion is important. In other words, these persons will consider the image to have lost a defining characteristic if Bill Gates is say, distorted in or completely deleted from the image. To identify these common portions of importance in an image is an intriguing field of research known as Pattern Recognition in Image Processing. Common processes like image resizing and image compression (example, changing an image from .bmp to .jpg format to save on space), tend to distort poor Bill Gates. If you change the image size of 300x500 to 300x300 using scaling in MS Paint, Bill Gates will look a lot thinner. Two Israeli scientists (Avidan and Shamir) recently invented an algorithm, named Seam Carving, which protects these important portions of the image while reducing or increasing its size. Seam Carving for Content Aware Image Resizing Avidan and Shamir came up with the idea that using an energy function one can more or less identify the important portions of the image. An image is represented as an array of pixels each of which has a position on the image and an intensity value between 0 and 255 for the 3 basic colors; red, blue and green. Simple observation says that more the difference in these intensity values for about pixels, more likely is an observer to notice that portion of the image; i.e., sudden changes in color are more apparent than smooth changes in color. This can be represented as a simple difference of the intensity values (known as the energy function of the image). When an image is subject to seam carving, a least energy path from top to bottom is removed, instead of just cutting a column. This will ensure that the least noticeable connected path is removed, and not the least energy

Featuring a project done by students as a part of the Softcomputing course that went on to be presented in an IEEE conference.

Figures: Clockwise from left: Input image. Resizing by scaling. Resizing by seam carving. Resizing by seam carving after softcomputing based pattern recognition

column. When you remove this connected path, the important objects (assuming that energy is best metric to define pattern) are retained in the image. Relevant Research in IIT Kharagpur A team of five 4 t h year undergraduate E&ECE students, with guidance from Dr. S. Barai (Associate Professor in Civil Engineering) have extended this idea of seam carving to a more general case. They assumed that energy is not the only metric to define the content and pattern in the

image. Using tools learnt in the course by Dr. Barai (Soft computing Tools in Engineering), the team developed a fuzzy logic and neural network based image processor that could vaguely detect human beings in an image. Fuzzy logic and neural networks are learning algorithms that try to imitate the human brain and perception. Since pattern is very subjective and differs from person to person, emulating the same to detect important portions in an image will give a better idea as to which areas in the image need more care during the resizing process.

Application and Future Prospects The above method was published in a paper at the proceedings of the 2008 IEEE Conference on Softcomputing in Industrial Applications. Remote areas requiring quick image processing of photos with humans (criminal, medical etc.), may require to transfer original images over low bandwidth connections. Such image resizing methods will help in retaining pattern while simultaneously enabling size reduction. The method may also be extended to videos, by considering planes in a space-time coordinate system as described Avidan and Shamir in a recent paper.

The fuzzy logic tool tries to break up an image into rough portions known as segments (say, an image with a tree, grass and sky will have 3 segments). The neural network is then tuned to detect human features such as skin color in the image. When the outputs of the segmented image and the output of the neural network are overlapped, the merged image gives a vague idea about where human beings may be present in the image. The results of this new method also show that like humans other important objects can also be similarly detected. The next step is to take the energy function, originally derived for seam carving, and add some extra energy to the portions of the image identified to have higher content by the soft computing methods, i.e., weight the human beings detected in the image. This will ensure that these portions are skipped when the least energy path is calculated and removed. The results were better than seam carving and normal methods like scaling. The man in the example has little energy content. Resizing methods such as scaling and seam carving therefore only distort his portion of the image, as shown. When the energy of the man is increased using the soft computing tools, he is protected from distortions during the resizing process. The result after image resizing by 50 seams shows little distortion.

TEAM MEMBERS Sushil Subramanian ([email protected])

Kundan Kumar ([email protected])

Bibhu Prasad Mishra ([email protected])

Animesh Banerjee ([email protected])

Debdutta Bhattacharya ([email protected])

Errata In the article "LHC - At World's End?" (September 21 Issue, page 8), the answer to the question "How does the LHC play a part in all this?" contains the sentence "… with a high energy release at a temperature of 1.9 K." 1.9 K is actually the operational temperature of the system's magnets; the collision temperature itself would wind up being several orders of magnitude higher.

THE SCHOLARS’ AVENUE

² W E D N E S D A Y , O C T O B E R 22 N D 2008

BHAAT A V E N U E

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A Floydian Slip of Tongue "As it burns, it smokes like incense and the smell of it makes them drunk, just as wine does, ... As more fruit is thrown on, they get more and more intoxicated until they jump up and start singing and dancing.” Herodotus, 450 B.C. Greek Historian, on the practice of burning hemp seeds on hot stones Somewhere near Mongolia. Several groups of small furry tribals gathered together in a cave and grooving with a hemp. A little known college dorm room. A place far, far away. Haze. In a time far, far away. Haze. Slightly messy. Jack Kerouac's "On The Road" lying open on the table. Aldous Huxley's "Doors of Perception" on the shelf. In the air, haze. In the ether, a sharp E note slices through. A sharp intake. Silence. Exhalation. Shapeless figures. Several numbers of hairy mammals gathered together in a room and grooving with a floyd. And me. J : "I feel I'm there!" K : "... and I have become comfortably numb." Strains of Floyd reverberate through the thick air. J : "Floyd brings the wall down, dude... I move away." K : "... a world of our own" Q : "Shapeless. Everything is just so right... like a dreamed up world." M : "Utopia is the word, my friend... Utopia" A bunch of people, hemmed in by a wall. Living under arbitrary rules and a heavily skewed gender ratio. Throw on a stressful academic session, remove quality distractions and you have a recipe for disillusionment. G : "I detach.. float. No exams, no pressure. Just me... and what I see..." J : "Falling circles. A whirlwind of colors." K : "Yup.. Any color you like..." Q : "It's a sad day for freedom..." K: "Yes, the freedom. Must the show go on?" "Where has the feeling gone”

And Pink Floyd was the cure. Like a burst of fresh air out of nowhere. Hitting all the right notes. Lifting. Lingering. Me : "Let's start with their music..." K : "Well... their songs are nebulous. A sort of ghostly feel to them. And they're simple. You get to concentrate on one thing at a time. And they lift you up to another plane. You flow with them. It's beyond explanation." Q : "They let you use your own imagination.... your own interpretation of the lyrics which I think is their USP." G : "But they get really weird sometimes... hard core psychedelic. Like they were doing drugs or something." M : "hihihihihihi... but there's more." Me : "Keep talking...” "Daddy what else did you leave behind for me?”

building walls. Ya know, and it forces us to fit into this [forms a rectangle with her fingers] ... this teeny weeny space. This confined, claustrophobic space, ya know... and... and... I mean there's... there's no space to break out. You break out. You get shot." "All in all you're just another brick in the Wall" J : "Long Live Germany!" K : "hahaha.. hihihihihi... haha" M : "Hehe... I'm serious. It's like the Berlin Wall. The moment you try to get over it... there this insane spotlight that comes over you... blinds you.. tries to make you forget where you're trying to go and that's what happens to most people... they forget and they cramp themselves. I don't want to be that.” Q : "Me neither.” Me : "So where does Floyd come in?" "Remember when you were young, you shone like the sun" M : "Floyd? It's all there. Everywhere. You feel bad. You listen to Floyd. You feel good. You listen to Floyd. You want hope. You listen to Floyd...” K : "Hahaha... Floyd is hope...." J : "More than hope... Floyd is like a caress... that you so badly want when you look around and find nothing left. someone to go back to, rest your head against, and be told gently and softly, whispering quietly into your head, that sooner or later, everything will be alright." G : "Na... Not for me. I just lose myself... float off.. Release. It's like lifting the valve on a pressure cooker.. You become so light.. you float like that note there... like time's stopped." [closes eyes and drops head back... lolling] J : "Floyd transcends explanation." Q : "There's this something else about it you know, something I can't really put my finger on.” "find a way to understand the feelings of the few” Q : "Floyd never tells you what is right or wrong. It never seems to judge. You are you and I am I. Free to be what we are and want to be." K : "Floyd says what I want to say. It's weird. It's like I'm singing it.” "... so come on you stranger, you legend, you

martyr, and shine!”

K : "See what I mean... we're all strangers here, all legends and all martyrs of some sort. I find meaning in Floyd. Acceptance. Floyd says what you want to hear but don't know how to say.... Shine on you craaaaaaaazy diaaamond." J : "... and something things that you want to hear but what no one says." And there you have it. Detachment. Loss. Hope. Drift. Nebulous and incorporeal. Ungraspable, yet identifiable. Pink Floyd.

K : "Will this ever end...” K : "Yes... Floyd connected me to myself. The sense of loss. Childhood's end. M : "It can't...” The independence. Or the illusion of it. It was like we tore down one wall only to "After all, without Us and Them, and The Great Gig in the Sky - both of which he wrote - what would The Dark Side Of The Moon have been?” land up within another wall.” David Gilmour M : "Ya... I came here with all these high hopes, these dreams. Only to land up another brick in a wall. It's society maan... constantly

Pink Floyd's legendary pianist Richard Wright passed away on September 15th , 2008, after a battle with cancer, bringing to close an unforgetable era in music history. Though, he may not be part of the band anymore, the magic he wrought will continue to enchant people for the times to come. After all, he never was, and never will be another brick in the wall.

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FEATURES AVENUE

Educational Startups Formula SAE comes to KGP TargetIIT.com VidyaCenter.com While most final year students were busy job-hunting, Suyash Katyayani was thinking bigger. Fueled by the desire to make learning better and easier, he took that leap of faith that transferred him from the growing mob of job-seekers to the rarified ranks of the jobmakers. Katyayani, an IITKGP alumnus(2007) along with fellow students Ashish Kashikar and Manu Midha started Vi d ya C e n t e r, t h e n e we s t offering in the field of elearning. It offers millions of students and teachers a unique platform to connect. Teachers can tailor courses for very

specific niches of students and students can find teachers specialising in very specific topics. VidyaCenter had almost 400 individual providers and 40 institutes offering courses and this number is steadily rising. With more students demanding personalised education, bright times lie ahead for VidyaCenter.

Nishant Sah, Lokesh Verma and Manish Shankar, 2008 Mechanical Engineering graduates, have come up with TargetIIT, a startup with a vision to set the benchmark of online education in India. The mission is to provide IIT aspirants a reliable source of education free of cost. Their website, has a plethora of facilities which include a forum where students can meet and discuss their doubts, online tests on individual topics as well as complete syllabus, applications (e.g. flash based or javascript animations) for better understanding of concepts, statistical analysis, etc. The inbuilt networking capabilities will help students interact with each other and find other likeminded students who are preparing for IIT JEE. This is especially useful for the students from smaller towns who lack the required exposure as compared to their counterparts in cities. TargetIIT.com also aims to serve as a place where current or exstudents can register to help JEE aspirants.

THE SCHOLARS’ AVENUE

² W E D N E S D A Y O C T O B E R 22 N D 2008

Animagic!

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pectra, the Fine Arts and Design group of IIT Kharagpur, conducted a workshop on 2D and 3D Animation on Sunday, 28th September with six experts from WEBEL DQE Animation Academy, Kolkata. DQ Entertainment is an award winning producer for High-end 3D Animation, traditional 2D and Digital Flash animation. The event was a grand success with a turn out of about 700 people - most of whom remained glued to their seats for the whole four hour duration. The organizers provided software such as Maya 2008 for the eager participants, who followed the demonstrations on their laptops. The experts held a presentation on the traditional 2D animation process used in television followed by a look at industry-quality 3D animation. These were accompanied by demos made by the students of the academy. The proceedings were topped off with an interactive quiz, and several DVDs of animated movies were distributed for prizes.

The Scholars’ Avenue is looking for talented First Year students with a nose for news! Keep a lookout for notices at your local bulletin board.