Friday 19 December 2008

Nawaz speaks up, admits Kasab is a Pakistani

It’s a slap on the face of the Pakistani government. Former Prime Minister Nawaz Sharif has acknowledged that Ajmal Kasab, the terrorists under arrest for the Mumbai attacks last month, is a Pakistani.

"I have checked myself. His (Kasab) house and village has been cordoned off by the security agencies. His parents are not allowed to meet anybody. I don't understand why it has been done," said Shraif in an interview to the Geo News TV channel.

"The people and media should be allowed to meet Kasab's parents so that the truth could come out in the open," he said, adding that "We need some kind of introspection."

Sharif’s statement challenges Pakistan President Asif Ali Zardari's claim that there was no proof that Kasab hailed from Faridkot village in Punjab province.

Zardari, who earlier acknowledged that the perpetrators of the Mumbai carnage could be 'non-state' actors from Pakistan, has now said there is still no "real evidence" that the terrorists who attacked Mumbai came from Pakistan.

"Have you seen any evidence to that effect. I have definitely not seen any real evidence to that effect," Zardari told BBC in an interview earlier this week.

Pakistani security agencies and local officials in Faridkot have launched a cover-up since India made it public that Kasab belonged to the village in Punjab province and his father acknowledged to a Pakistani newspaper that the gunman captured in India was his son.

Sharif also slammed President Zardari's rule, saying the functioning of the current Pakistan People's Party-led government is making Pakistan look like a "failed state". Pakistan presents the picture of a failed and ungovernable state due to the absence of the government's writ and the country urgently needs a new roadmap to pull it out of the problems it is currently facing, he said.

"Since 1977, the army has ruled the country for more than 20 years... A state subjected to frequent military intervention in politics can only become ungovernable." Sharif also criticised what he described as the government's "clarifications" regarding the purported violation of Pakistani airspace by Indian fighter jets.

Amnesty International slams Indian anti-terror law

Amnesty International on Friday slammed India's new anti-terror legislation to beef up police powers in the wake of the Mumbai attacks, saying it violates international human rights treaties.

The London-based human rights group called on President Pratibha Patil not to approve the legislation, which would double the number of days police can detain terror suspects before filing charges, from 90 days to 180, as well as boost their powers to conduct searches.

Both houses of India's Parliament passed the bill this week, following last month's attacks on Mumbai by suspected Islamic terrorists that killed 164 people. It now needs President Pratibha Patil's approval before becoming law.

"While we utterly condemn the attacks and recognize that the Indian authorities have a right and duty to take effective measures to ensure the security of the population, security concerns should never be used to jeopardize people's human rights," Madhu Malhotra, Asia Pacific Program Deputy Director at Amnesty International, said in a statement.

Officials at the Home Ministry, which drafted the bill, could not immediately be reached for comment Friday.

The government's top law enforcement official, Home Minister Palaniappan Chidambaram, defended the bill in Parliament on Wednesday as providing an 'adequate balance' between 'the demands of human rights and the people of India for strong anti-terror laws.'

The Mumbai attacks revealed glaring gaps in the nation's security systems and a shaky intelligence apparatus that missed several warning signs of the siege, which lasted for three days and paralyzed much of India's financial capital.

The anti-terror bill, which was sent to Parliament along with a bill to create an FBI-style national investigation agency, was meant to beef up the powers of India's police and judicial system to combat terrorists.

But Amnesty said the process was hasty and would likely undermine the rule of law and violate international human rights treaties. It did not specify the treaties.

In particular, Amnesty raised concerns about the sweeping definition of terrorism, extending the detention of suspects by up to 180 days, denying bail to foreigners who enter the country illegally, and the requirements, in certain circumstances, for the accused to prove their innocence.

It also condemned giving courts the right to close proceedings to the public.

Communist opposition parties had called for changes to the bill, fearing human rights abuses, but ultimately voted in favor.

"To detain a person for up to 180 days will be an infringement of his human rights. We are against it," Basudeb Acharia, a senior leader of the Communist Party of India (Marxist) told The Associated Press.

Despite Chidambaram's assurances, the government has long resisted introducing a tougher anti-terror law since repealing a law written by the Hindu nationalist BJP after coming to power in 2004, saying it was draconian and would unfairly target India's large Muslim minority.

"India's experience with previous anti-terrorism laws has shown that they can lead to abusive practices," Amnesty said.

India has blamed the Pakistani-based militant group Lashkar-e-Taiba for the attacks and called on Pakistan to take strong action.

Pakistan has made some arrests and shut the offices of a charity believed linked to Lashkar. But Pakistan has said India has failed to share evidence from the attack that would allow them to act.

HDFC cuts home loan rates for all customers

HDFC Ltd, the country's largest housing finance company, on Friday cut its lending rate by 50 basis points for loans of more than Rs 20 lakh for both existing and new customers and introduced a new slab for sub-Rs 20 lakh.

Loans of up to Rs 20 lakh will attract an interest rate of 10.25 per cent and the rates for loans above this level has been pegged at 11.25 per cent down from 11.75 per cent. The new rates would be effective from Monday.

"The advantage of a cut in retail prime lending rates (RPLR) will accrue to all the existing floating rate customers over a period of next three months based on their respective reset dates," HDFC said in a statement.

The housing major's decision to reduce rates comes within 24 hours of Home Minister P Chidambaram announcing in Parliament that the government will persuade banks to reduce loans for existing home loan borrowers as well.

HDFC also decided to reduce the deposit rates by 50 basis points, the statement added.

HDFC's closest competitor in home loans ICICI Bank had earlier in this month reduced interest rates by 150 basis points to 11.50 per cent for fresh loans of up to Rs 20 lakh.

Public sector banks have already capped the interest rates at 8.5 per cent for loans up to Rs 5 lakh to encourage low-income housing.

For middle-income loans of Rs 5-20 lakh, the PSU banks would charge a maximum of 9.25 per cent. These rates would be

reset only after five years.

The scheme by PSU banks is valid up to June 30, 2009. The state-run banks have also done away with processing fee and pre-payment charges for loans up to Rs 20 lakh.

In addition, the PSU lenders have decided to offer free life insurance cover to the home loan seekers as an add-on with the credit.

Nobody spared: Ambani brothers fight recession

Recession may have just become a worry for Mukesh Ambani and Anil Ambani, brothers who own some of India’s most valued companies, too.

Sources tell Network 18 layoffs and cost cutting have been ordered in Reliance Industries Ltd. (RIL), owned by Mukesh, and the Anil Dhirubhai Ambani Group, which is owned by his younger brother Anil.

Sources say several senior and mid-management executives across the RIL group companies have been asked to leave. The company has scrapped plans for its semi-conductor business for now and the team for the project has been asked to leave, sources say.

CNBC TV 18's Executive Editor Shereen Bhan reports RIL’s official position is that three of its key projects—all related to its petroleum and gas business—are in the final leg of implementation. But the company makes no mention its retail business, which was seen as a growth industry but now may be scaled down because of recession.

Network 18 asked for a statement from RIL on whether it was downsizing and was told: "As a good corporate practice, we constantly examine our cost competitiveness and take appropriate measures regularly."

On layoffs in its management team, the company said: “Apart from normal attrition, we are not aware of several senior and management executives across the group (who have) been asked to leave."

Cost cutting “is a practice which is undertaken constantly at Reliance”. Asked whether it planned to put its semi-conductor business on hold for now, RIL said: “As a part of our business expansion, we continue to evaluate various long term potential business opportunities. As a matter of policy we do not comment on any business which is still in the evaluation stage.”

CNBC-TV 18’s Economic Policy Editor Vivian Fernandes reports that ADAG has laid off 6,000 people. The lay-offs cut across ADAG companies in life insurance, general insurance, mutual funds, commercial and consumer finance, and entertainment.

The job cuts have been implemented in all hierarchies: from marketing heads to middle management and lower management officials and customer executives.

Sources say ADAG has drastically pared its marketing team for life insurance in Mumbai and in Delhi it has been disbanded. Marketing budgets have been cut too.

The number might seem big, but not in relative terms as the life insurance business of ADAG employs about 30,000 people.

ADAG denied any lay offs or retrenchments. The company predicts that the next few months would be a high-investment season for tax saving products and it would employ up to 90,000 agents and sales representatives.

Lower pay hikes seen for Indians in 2009

Anticipating a decline in its business performance in 2009, corporate India is likely to cut back on the planned salary increase in the coming year, even as most firms plan to avoid huge job cuts, a latest survey says.

A majority of companies in the country are trying to be selective in planning the workforce, compensation and benefit cuts for 2009, while they anticipate a decline in business performance next year, according to global HR consultancy, Mercer.

The survey revealed that 83 per cent companies expect salary increases in the coming year to be lower than originally planned by them. The responses indicate that the companies are planning to look closely at holding down the level of compensation increases in 2009.

However, only 19 per cent of survey respondents are considering the more drastic step of freezing 2009 salaries at 2008 figures.

The results for companies in India generally match survey findings from other parts of the world. In China, Australia, the United Kingdom and the United States between 20 and 30 per cent respondents believe that the 2009 bonus payout would be reduced from that originally planned.

"India grew on the back of her knowledge- and people-centric industries such as financial services, information technology and retail, among others. However, due to employee costs having risen in India at double-digit rates since 2003, cost structures have been coming under severe strain," Mercer Consulting (India) country leader Padma Ravichandar said.

Most companies in India plan to avoid significant workforce reductions, but they do not plan significant hiring either, the survey revealed.

Nearly two-thirds (63 per cent) of companies surveyed revealed that a significant reduction in workforce was unlikely. Meanwhile, only one in four firms expects to continue hiring activities at or above replacement levels.

This current situation should be perceived as a cooling-down period in terms of talent costs. This is a levelling act which may help India remain cost competitive in the long run. In the near term, the adverse impact of business sentiment seems all pervasive, Ravichandar added.

Over 80 per cent of respondents expect their company's business performance to decline in 2009, the Mercer survey noticed.

Further, corporate India expects mergers and acquisitions to be severely affected next year, with fewer than 7 per cent of the survey respondents expecting increased M&A activity.

The Mercer survey, conducted in early November, collected responses from over 100 human resource and finance professionals in India, as part of more than 1,000 responses from around the world.

SUN pictures to produce Rajni-starrer ‘Endhiran’

The multi-crore Rajnikanth-starrer ‘Endhiran’ , will be produced by the Sun pictures, a film division of the Sun Television Network.

Directed by Shankar, the movie has Aishwarya Rai Bachchan as the heroine and noted music director A R Rahman scoring the music, a release from Kalanidhi Maran, owner of the network, said here today.

"This is India's biggest movie and I am very happy and honoured to work with Sun Pictures and Kalanidhi Maran" Rajnikanth said.

Shankar said it was a pleasure working with Rajnikanth and to be associated with Sun Pictures and Kalanidhi Maran in the project.

"This is a big moment for Sun Pictures as we feel this is going to be India's biggest film. We are very happy and proud to be associated with Superstar Rajnikanth, Shankar and A R Rahman. With this Sun Pictures shall scale greater heights internationally" Kalanidhi Maran,grand nephew of Chief Minister M Karunanidhi, said.

The release said the film's production was delayed due to some financial constraints.However, with Sun Pictures taking the initiative the movie is expected to be released simultaneously in Tamil, Telugu, Hindi and other languages by the end of next year,it added.

Tigers in Dimbam

A concerned wildlife enthusiast hopes for a middle path that will give both villagers and the tiger a chance for survival. Divya Sridharan reports.

Photo: M.A. Sriram

Man Vs beast A very real concern

En route to Dimbam, it gets picturesque, in a very rugged way. A barking deer suddenly zips past the road. And for miles on end, you hardly come across a fellow traveller. The sound of silence is cathartic. Way past Sathyamangalam road, you drive up the hills that will lead to Mysore – eventually. But, today’s journey ends a little before you reach the Border check-post that demarcates the states of Tamil Nadu and Karnataka.

Tiger stalking

As we approach Dimbam, wild life enthusiast, Krishna Kumar elaborates upon why this expedition has been made.

“Over the last eight months, 22 kills have been discovered around these parts. The cattle found dead were definitely killed by the tigers that live in these forests”, he says.

“The tiger suffocates its prey while breaking the neck of the animal. It is easy to distinguish this method when compared to, say the leopard or wild dog, for these too stalk this region”, he explains. Krishna Kumar delves into the history of his association with the tigers in Dimbam.

A citizen of Coimbatore, he grew accustomed to Dimbam while spending time in his farm here. A few years ago, a villager from this region approached him with a tiger’s nail, considered auspicious by some.

This was Krishna Kumar’s initial introduction to the possibility that this majestic animal might have made this region its own. He soon learnt that the villagers here had taken to poisoning the carcasses of the livestock, which were preyed upon by the tigers. This was to ensure that when the animal returned to resume its feed, it would be poisoned to death.

“While on one hand, it is a question of the villagers’ primary occupation, what is also at stake is the possible extinction of an animal that we need to protect. Over the past ten years, at least three tigers have been killed in this region”, he reveals.

Research findings

Through meticulous study, Krishna Kumar has ascertained the existence of at least four tigers that presently roam the region that covers at least nine villages.

This is just within the radius of 30 kilometres.

“The WWF has sent inspectors to study this area. They are trying to convert this region into a tiger reserve. But in the meantime, the cattle continue to encroach upon the territory of the tigers. It is my belief that the tiger is endangered in southern India primarily due to the encroachment of its territory by human beings”, Krishna Kumar says.

Compensation

In Mavanetham, a settlement of villagers around these parts, we meet Mohan, whose ox was killed by a tiger recently. “Mr. Krishna Kumar compensated me with Rs. 12,000 for the loss of my cattle. I was then able to buy another ox”, Mohan reveals. Close to Rs. 70,000 has been given by Krishna Kumar to the villagers, in lieu of the loss of their cattle.

Help to the villagers

He has been supported by personal friends, acquaintances and societies such as the Coimbatore Round Table ACME towards meeting this end. In the pipeline is the setting up of a society driven towards compensating the villagers.

Krishna Kumar reveals that the society will seek to bring under its wing the districts of Coimbatore, Nilgiris and Erode. “Ideally, there ought to be no further encroachment of the tigers’ territory by human beings. But, in this situation, this will be more than just difficult. Compensating villagers with money might allow us to arrive upon a middle path”, he says. One hopes that by doing so, and subsequently declaring this region as a tiger reserve, this majestic creature will be given adequate protection.

Gold rush

Successfully fighting off challenges from platinum and diamonds, gold remains an all-time favourite, writes RESHMA KRISHNAMURTHY SHARMA

Photo: AP

Grab it We can never have enough of the gorgeous yellow metal

Driving across the city, one is bound to notice hoardings that insist that platinum is the metal of choice for the new-age woman. There is also the oft-repeated phrase of diamonds being a girl’s best friend. However, no amount advertising or pr omotional activities can change the fact that Indian women have a major soft spot for gold.

The precious metal has managed to attract patrons in all age groups fighting off strong competition from other metals. What is it about gold that explains its mass appeal? Is it looks or the perception of gold as an investment or the popular opinion that gold looks good on Indian skin that attracts buyers?

Dancer Vani Ganapathy, who loves jewellery believes the fascination of gold comes from history. “The concept of possessing gold jewellery is very strong in our country. It is something that is passed through generations. Mothers pass their jewellery to their daughters or in-laws share the family heirlooms with daughters-in law. Even historically and in myths, it is gold and not platinum or diamonds that play an important part.”

Srinivas, Branch Manager, Bhima Jewellers says: “Gold has always been seen as a safe investment. People believe that return on gold jewellery gives them better value than other jewellery be it pearls or precious stones. This combined with its use for once-in-a-lifetime occasions like marriage contributes to its popularity.”

Though silver jewellery or miniature studded stones are popular with the younger generation, gold is not left behind. For those who find gold too flashy or gaudy, the yellow metal has morphed with the times. Whether by entering into the branded jewellery segment or offering minimalist designs at affordable prices, gold has ensured its strong position across societal strata.

Actor Jennifer Kotwal, who is also the brand ambassador for a jewellery chain, comments: “Gold has been adapted to suit contemporary tastes with classier pieces. If one has a problem with heavy sets or the dilemma of wearing gold over western outfits, then one has the option of doing a mix and match like wearing a gold pendant with a diamond stud or going in for classy look depending on the occasion, and one’s own style.”

Whether as an investment, or for the intricate designs, gold will always be a must have in our jewel boxes.

Towards a renaissance of the IITs

Had the IITs followed and succeeded in their original mission, India’s gross national product would have increased over ten times. They can yet become a force for rising India’s social, economic, and technological transformation.

The IITs were created to focus on research and postgraduate education that would keep India on the leading edge of knowledge in science and technology for building a prosperous India. Building a prosperous India meant using research and development (R&D) to raise the incomes of the poor and near-poor who constitute 80 per cent of India’s population. Despite the well-deserved kudos showered on the IITs’ undergraduate education, none of the IITs ranks in the top 100 institutions in the world in research based on any measure. Nor are the IITs graduating enough PhD students to meet the faculty needs of their sister IITs and other engineering colleges and technical institutions, let alone create a national culture of innovation.

Had the IITs followed their original mission and had their work raised the productivity of the adults in the 80 per cent of the poor or near-poor population to even half of the level of the leading industrialised countries, India’s gross national product would have increased over ten times.

I argue that the IITs can still become a major force to lead India’s social, economic, and technological transformation. I humbly suggest a plan the IITs could follow to pursue this original goal. First, they should support themselves financially. Secondly, they could focus on R&D in three interdependent domains: sustainability, partnerships with public and private organisations, and rural areas and slums to improve the economy of the poor and near-poor. Thirdly, the IITs could expand postgraduate education and include community engagement in undergraduate education.

Self-support, autonomy, and accountability

The IITs could treat the costs for IIT undergraduate students as loans, and the students would pay a percentage of their incomes until they pay off the loans or until they reach a certain age. The government, public and private organisations, and the alumni would support targeted research and postgraduate education. With reduced financial responsibilities, the Government of India should grant administrative autonomy to the IITs and create a system for their long-term accountability.

Research on sustainability

The IITs can become world leaders in research on sustainability. Their work can give India an economic advantage in the global market for sustainable technologies. The IITs could conduct research on ways to simultaneously reduce pollution, recycle wasted by-products, decrease the use of scarce or toxic resources, cut costs, and improve quality.

In addition to the direct economic benefits, this would also reduce disease, suffering, and health care costs. About 75 million of its 120 million rural households lack electricity. Appropriate technologies are available to meet their limited needs but require further R&D to make them operationally and economically viable. India could leapfrog over the high-income countries by developing new and renewable sources of energy.

The IITs could conduct research on all aspects of material science: creation of new materials and composites, use of new materials, and improvements and new uses for existing materials. India has yet to fully explore and develop the material resources that are unique to India, are abundant in India, or are renewable. For housing in villages, the IITs could improve such local materials as wood, straw, locally made bricks, and chunam (lime stone) and the technologies for using them.

The IITs could conduct research on rainwater harvesting and improve technologies for building water tanks, storage ponds, reservoirs, and gully plugs to raise the groundwater table. Such technologies would help in addressing the issue of melting of Himalayan glaciers that supply water to major rivers, better management of forests, soil conservation, reducing occurrences of droughts and floods, reversal of environment degradation, and mitigating the effects of global warming.

The burden of ignoring sustainable development will be borne relatively more by the low-income families because they cannot afford to pay for items that become expensive because of scarcity or for items needed to mitigate the effects of poor sustainability, such as air conditioning, health care, and automobiles.

Partnerships

The IITs could develop long-term strategic alliances with organisations that have R&D facilities, for example, multinational corporations, Indian companies, the Defence Research and Development Organisation, nuclear energy plants, and the space programme. Most organisations in the private and public sectors rely on off-the-shelf technologies, some of which are obsolete, and the IITs can address their needs. These organisations could recruit a large number of IIT PhDs each year to conduct research to increase their productivity and value.

Solutions for rural areas and slums

Solving the problems of rural areas and urban slums would require a combination of institute labs and development labs in villages and slums. In this pursuit, the IITs could collaborate with their alumni and the Indian Institutes of Management. Once these communities develop successful prototypes, the government and the private sector could replicate them throughout the country and persuade other engineering colleges and diploma-granting institutions to help in adapting the prototypes to individual local settings. India’s villages are ideal settings in which to create sustainable models of economic development that can be replicated in the rest of the world.

Each IIT could set up a laboratory dedicated to research into improving the infrastructure, products, and services that are used primarily by people near or below the poverty line. The IITs could create entrepreneurship programmes to help commercialise the products.

Each IIT community could adopt one or more slums and a cluster of villages whose level of economic development is below the national average to use as development laboratories. In villages, the IIT community could focus on developing water resources and conserving soil, improving housing and sanitary conditions, improving the tools and processes local workers use and the products local craftsmen make, building community cold storage facilities for small-scale farmers, creating home-based businesses for seasonally employed agriculture workers, building roads, and providing electricity. In urban slums, the IIT community could focus on the following areas: sanitary conditions, housing, water, electricity, and tools and processes used in industries located in the slums.

The alumni would contribute their talents and financial support to the development labs as guru dakshina. Clearly, the alumni owe most of their guru dakshina to the poor because the money the government spent on the IITs could have been spent on improving the incomes of the poor.

Partnerships with companies could help in commercialising successful prototypes developed and tested in the field labs. They could also lead such other collaborative efforts as partnerships with thermal power corporations on electricity for rural areas and with refrigeration companies to build prototype cold storage facilities.

PG and UG education

The IITs could pursue their original goal of expanding both masters’ and PhD programmes. They could waive loan repayments for those IIT undergraduates who went on to earn postgraduate degrees at an IIT. The IIT’s extensive alliances with entities in private and public sectors could provide support for postgraduate students’ research. The pursuit of integrated solutions to the problems of villages and slums could provide ideas for new areas of research.

When IIT graduates join the faculties of other engineering and polytechnic colleges, they would take with them a focus on work useful to the Indian economy. They would help to create a national culture of innovation.

As part of the curriculum, each student could conduct in-depth interviews with members of two low-income families about their economic and social well-being. The students could make public presentations about these interviews and propose ways to raise the incomes of these people. Such engagement with society would create a vibrant learning environment and help the students become more effective engineers, entrepreneurs, managers, public administrators, and researchers.

The poor have a deep-rooted disadvantage in the IIT entrance examination because of their lack of access to private schools and the tutorial classes. As a result, the IITs are increasingly admitting students only from high-income families. The fact that IIT graduates are succeeding in the job market and in their careers does not prove that those left out would not have performed as well or better. The IITs should examine these issues and try to draw students from all economic backgrounds.

By pursuing these initiatives, the IITs can speed up the social and economic transformation of India and lead the world in sustainable development. They can capture the imagination of the Indian people and take themselves to new heights.

Bradley turns PCs to gold for Hewlett-Packard

On a rainy day in Cupertino, Calif., Todd Bradley picks through products that his division at Hewlett-Packard has recently introduced.

There's a sleek laptop called the Voodoo Envy for hard-core gamers, a tiny pink-and-red computer created with fashion designer Vivienne Tam, and the industry's first touchscreen notebook. Impressive offerings perhaps, but Bradley looks more pained than pleased. "All I see when I look at these things is that our cost [of production] is never low enough and our customer service is never good enough," he says.

The head of HP's personal-computer division has helped the company become the top PC maker in the world and has fattened profits at the same time. But he can't stop worrying about what could go wrong, from competitive threats to the global economy's meltdown. "We'll never be done," Bradley says.

Beating Dell

As the deepening recession hits companies around the globe, HP is navigating through the crisis relatively smoothly. On Nov. 25, CEO Mark V. Hurd reported fourth-quarter earnings that handily beat Wall Street expectations and predicted the company will emerge from the downturn even stronger.

While there are many reasons for that, including HP's expanding services business and lucrative printer franchise, a big factor is Bradley's division, which brings in $42 billion annually from the sale of PCs, handhelds, and workstation computers. Even as rivals such as Dell and Lenovo have seen a sales slowdown recently, Bradley's group reported double-digit revenue gains.

"The market is terrible, [but] they've done a good job," says David M. Klaskin, chief investment officer at Oak Ridge Investments, which holds the company's stock.

Three years ago, when Bradley was brought in, investors wanted HP to jettison the PC business. IBM had just sold its unit to Lenovo, and it looked like Dell would dominate the industry with its low-cost, no-frills, direct-sales model. With remarkable speed, however, HP has knocked Dell on its heels and shown it's not just Apple that can innovate in the computer business.

The man behind this turnaround is a tall 50-year-old, described by colleagues as an unapologetic workaholic. Before HP, he had a tumultuous tenure as chief executive of handheld pioneer Palm. He tangled with the company's founders over strategy as Palm lost share in the handheld market, though it gained ground in smartphones.

Bradley's strategy at HP has been a blend of hard-nosed execution and practical innovation. The approach depends on creating fresh designs and eye-catching marketing campaigns. Behind the scenes, though, Bradley and his team use a bucketful of metrics to ensure the operation is tuned just so.

They measure profit margins for every PC and how many R&D dollars go into each product line. They also revamped purchasing so costs are rock-bottom. HP used to buy parts such as memory chips and batteries on the spot market, getting prices close to those of its rivals. Now behavioral scientists from HP's research lab forecast demand for components. Supply chain boss Tony Prophet then uses those projections to negotiate long-term contracts at favorable prices. There's risk if the forecasts are wrong, but the savings can be 20% or more.

Bradley believed from the start that HP had to change its PC business. If it kept trying to sell boring boxes at the lowest cost, it would be locked in a brutal struggle with Dell.

So with marketing lieutenant Satjiv S. Chahil, Bradley asked a local ad agency to create a video to convince the executive board that HP needed a new approach. The video argued that PCs had become a commodity because makers had ceded all innovation to chipmaker Intel and Microsoft. The clip then outlined how HP could get out of the commodity game. "'Wow!' is what sells," says Bradley.

Hurd was convinced. The result: a marketing campaign stressing how HP computers are different from others. Hip-hop mogul Jay-Z and tennis star Serena Williams talked about using HP PCs to watch movies without first waiting for Windows to launch as well as to look at photos and edit music. The TV spots wrapped with a slogan: "The computer is personal again."

The Right Balance

The timing was fortunate. When the campaign began in 2006, consumers were looking for laptops that could easily navigate the Web, play games, and store digital content. They also were buying more from retailers such as Best Buy, where they could try out the latest technology. The trends gave Bradley an edge over Dell, which had no presence in retail stores at the time and stressed low costs. HP quickly surpassed Dell to become the world's top PC seller.

Bradley's key challenge has been striking the right balance between innovation and price. To hit the mark, he uses a metric that HP insiders call "R&D productivity." It measures R&D spending as a percentage of gross margin for each product line. A standard desktop computer with low margins may get one or two innovative features, while a high-end laptop with fat margins would get enough flash to make it stand out. To determine the appropriate R&D level, HP does three-year projections of expected gross margins.

Last year, for example, HP introduced the first touchscreen, all-in-one desktop. While few other PC makers were putting money into desktops, HP saw an opportunity for a premium-priced product if the touch technology would make it easier for families with kids, among others, to use. The TouchSmart PC, which can go for more than $2,000, has helped boost profits and sales, says Phil McKinney, the division's chief technology officer.

Today, Bradley frets about maintaining HP's momentum. His concerns are evident in mandatory conference calls he has with his top 16 executives every Thursday at 7 a.m. Pacific time. This year he led the call on Thanksgiving morning as the Macy's parade played silently on his TV. Among other things, Bradley wanted to make sure none of HP's suppliers would come up short for the holidays. "We did get a little holiday gift," says McKinney. "He ended the call a few minutes early."

Help wanted: $1 trillion stimulus

The Obama stimulus package cannot come soon enough.

Even as infrastructure plays from US Steel to Fluor rallied in the stock market, another potential bubble was bursting--the vast market for municipal debt owned by wealthy individuals everywhere and absolutely required by hospitals, bridges, water systems and towns and cities across the nation.

The municipal bond market is the lifeblood for the effective operation of cities from New York to Los Angeles, for social and welfare organizations, for the operation and maintenance of local and state government.

Banks are issuing preferred stock with yields of 10% and higher. Nice yields, but don't get suckered into buying bad paper. Click here for Forbes-Lehmann Income Securities Investor.

The smart money (solvent hedge funds and wily traders) are betting on state and local government defaults. The market is pricing the cost of buying insurance on muni debt at 330 basis points--more than it costs to protect your portfolio of investment grade corporate debt. This is a bad sign.

The MCDX, a derivative contract on 40 different municipal bonds is being used to short munis, a bet that prices are going down because local governments will have trouble paying their tax-free interest coupons to investors. Protection on $10 million worth of munis will cost you $330,000 a year, which means you're paying a fee of 3.3% to protect principal on a bond that might be paying 4%. Net interest income on that deal is a measly 0.7%.

With T-bills effectively at 0% and long Treasuries at 3%, investor psychology has reached a crucial inflection point. It is truly frightening to see New York Times bonds yielding 23%, an indication that the nation's leading newspaper company is headed for defaults or outright bankruptcy.

So, what in the potential stimulus plan can turn this deterioration of the markets around? To put this in perspective, a $1 trillion stimulus would be equal to 50% of the entire prospective federal budget for fiscal 2009.

A lower payroll tax for 95% of the population is unlikely to stimulate consumption, but it could be helpful in servicing mortgages and paying off credit card debt. Obama's original plan called for a cut of $780 billion over 10 years or about $80 billion a year. Clearly, with people worried about their jobs, they're more likely to save rather than spend. In fact, saving rates look to jump to 10% next year, according to Chris Wood, CLSA market analyst. The last time savings hit 10% was in 1985.

Infrastructure spending is a given. There are projects worth $70 billion already approved but needing money to go ahead. Obama will probably push ahead on these projects and give money to state and local governments to refurbish transportation and other facilities.

Problem is that new projects take years to gain approval to go forward. It means that the infrastructure payoff won't be in the first half of 2009. That is the predicament faced by Obama.

There will be a "green energy" program that is still vague right now and seemingly doesn't have much chance of adding to economic activity in the short run.

What hope is there for the stock market? Goldman Sachs is predicting earnings for the S&P 500 next year of $53. A multiple of 15 puts the index at 795 which is still lower than where we are today just below 900. It is hard to see how you could put a higher multiple on those earnings in the environment we are expecting. That suggests the recent rally will reverse its gains.

Some observers of the scene think a special holiday for investors on capital gains taxes might spur investing. Or that a special tax credit for buying autos will help the economy. Hope springs eternal.

A wiser view comes from Bill Gross, CIO of PIMCO, who believes stocks are not cheap in a time of "more regulation, lower leverage, higher taxes" when the government already owns roughly 20% of all bank capital and may soon own more. As Gross says in his December investor letter: "Better to own corporate bonds than corporate stocks."

Indeed, the yield on many intermediate term corporate bonds is around 8.4%, which is roughly the expected annual rate of return on stocks. If you count on those interest payments being made, this kind of return looks like the most compelling in the marketplace.

Kumble nominated to anti-doping panel

India's former cricket skipper Anil Kumble has been nominated to the athletes' committee of the World Anti-Doping Agency (WADA).

The leg spinner, who retired last month as the third highest Test wicket-taker with 619 wickets, has been included in the list announced on the WADA website (www.wada-ama.org).

Kumble's term will start on January 1.

One-third of the panel members, who play an advisory role in policy and priority development of the agency, are replaced on a rotational basis annually.

The International Cricket Council (ICC) is a signatory to the WADA Code.

Chanda Kochhar named ICICI Bank CEO


The ICICI Bank [Get Quote] board, on Friday, named joint managing director and CFO Chanda Kochhar as the bank's chief executive officer and managing director. She will take over from K V Kamath, the bank's current CEO and MD, when his term ends in April 2009.

The board also appointed Kamath as the non-executive chairman of ICICI Bank, a role being performed by his mentor Narayan Vaghul, who is scheduled to step down once his term ends in March. Vaghul has been with the ICICI group for 24 years.

Kamath had started his career in 1971 at erstwhile ICICI and after a stint with the Asian Development Bank [Get Quote], he returned to ICICI as its CEO in 1996. Initially, he headed ICICI, the development financial institution, and was instrumental in its transition into a universal bank in 2001.

Kamath, now also the president of the Confederation of Indian Industry (CII), is a member of the boards of the Indian Institute of Management, Ahmedabad, and the Manipal University.

Apart from Kochhar, ICICI Prudential Life CEO Shikha Sharma was also in contention for the bank's top post. The others who were in the fray include executive directors V Vaidyanathan, Sonjoy Chatterjee and Madhabi Puri-Buch.

Kochhar had joined the erstwhile ICICI as a Management Trainee in 1984. When ICICI decided in 1993 to enter the commercial banking, she was deputed to ICICI Bank as a part of the core team to set up the bank.

She was instrumental in setting up and scaling up the retail business for ICICI Bank. In April 2001, she took over as the executive director, heading the retail business in the ICICI Bank. In April 2006, she was appointed as deputy managing director.

She has often featured in the Fortune magazine's annual lists of most powerful business women across the world.