Do Start-up Projects have KARMA?

My wife will kill me for writing this, as she believes we should not mess with KARMA...but what the heck, so I am biting the bullet and risking my dinner tonight, just to illuminate you (yes, I have this blog to nourish my ego!).

In the last 20 years or so, Dozens of "Eastern" concepts were put out of the context, most of the time to make money out of the clueless and depressed Western people...

Even quantum physics (QUANTUM PHYSICS for haven's sake!) became a topic amongst "desperate housewives"...

Karma is another example...

When you look at the literal translation of the word "KARMA" from Sanskrit, you will see that it stands for ACTION...

In a broader sense it defines the cause-effect correlation between actions and consequences.

so, you see, this is an INTERNAL (about YOU) phenomenon, not an EXTERNAL (about others or an invisible power)...

On the other hand, we always hear people using KARMA as an excuse or explanation about what HAPPENS to them...

Actually project management or specifically start-up management is a perfect platform to observe
this misunderstanding...

A couple of days back, while discussing another (definitely not the first) stupid mistake (the bank had lost a document necessary for an urgent credit) with the owner of the Start-up Project I am consulting for, the phrase "this project has a bad karma." slipped out of my mouth....You should have seen the relief in the man's eyes...so "this was about KARMA, nothing could be done! Let's be positive!"

Don't get me wrong here, I do believe that positive attitude will always help...at the end of the day, why start something if you are not positive about it?!

but...

What I do not totally agree is that this has anything to do with metaphysics or divine energy or Toltecs in Mexico!

Simply, if you are positive, you will attract the other positive people who have clear and healthy minds which drive them to MAKE THINGS HAPPEN or constantly looking for solutions and/or precautions for probable problems or mistakes...

Being positive, you will work in an enthusiastic way and you will not be too lazy to get a notarized copy of documents which you hand to a bank to get credit, so that when and if they lose them (people DO lose things), you will not have to wait for another week before your overseas supplier sends another original by DHL!

Being positive, you will not take setbacks as catastrophes, but merely as situations and you will learn from them (if we want to put it in Buddhist terms, "you will appreciate the setbacks")...

And all these (YOUR actions) boil down to a better KARMA of whatever you are doing...

Being positive, on the other side, just for the sake of being positive not taking ACTIONS will only make you look like a happy loser!

So, YES, your start-up (just like anything else) does have a KARMA, but this KARMA is YOU...

As Mahatma Gandhi said:

"Be the change you want to see in the world."

Good Karma to all!

Cyprus solution reached ...oh, REALLY?!

This morning we woke up to the news that late last night, the talks in Brussels between Cypriot leadership and the Troika had ended with a solution...

Let's have a look at the "solution":
==================
Apparently, the depositors with less than 100k Euro's in the banks are exempt from the "haircut" which, given the size, I would actually call an amputation...

The ones with more money than that 100k treshold will lose upto 40% of their money in the banks through taxes and/or forced swaps with some bank equities/assets.

One bank will definitely will be closed while out of the rest will be created a GOOD bank...
===============

some supplementary info:

The bank branches have been closed for more than a week now and the latest daily withdrawal limit off the ATM's is 100 (hundred) Euro's!!!

Officially the banks were said to be reopened tomorrow, while this is not really expected now, as the bureucrats are afraid of a bank run...and even if they DO reopen, some very tough capital controls will be in place to stop depositors from freely withdrawing or transfering thir money!

Is this really a solution? Definitely not, as all the parties involved (except Eurozone and IMF) were hit explicitly or implicitly with this decision; let's have a look:

The depositors (and we know more than half of the deposits in Cyprus banks were bigger than 100k E) with big accounts are explicitly punished with a hit of as big as 40% to their vallets...it is still a question mark at least for me whether they really would want to get out of those banks immediately as :

1) Some might think a swap of money with some assets could still be worth waiting to see, rather than bowing to the de-facto situation of losing a big chunk of money by exiting the cyprus banks.

2) Some of those BIG depositors might think it is a better option to stick to Cyprus rather than trying and finding an alternative "haven" for their money as they will probably have to answer some unpleasant questions about the source of their money.

3) Not many safe and tax free destinations are left at least in or around europe and other OCEAN ISLANDS may not be even as safe!

On the contrary, I think the people with less money in their deposits might find it easier to go for the bank run to save their money to keep for the time being under the matress.

Coming back to what would be a real solution...

From day one, it was clear that no solution to cover ALL THE PARTIES was possible.

Troika wanted Cyprus to contribute.

This contribution was clearly only possible through the deposits.

They could (as they first tried) go for an allaround haircut which would hit both the big AND the small account holders.

or

They could stick to the EU regulations (which say deposits under 100k are INSURED, so untouchable) and exclusively punish the (mostly expatriate) BIG depositors.

They chose the second option, so at a first glance, the small savers look to be safe...but are they really?

About 80% of the GDP (which is only about one seventh of the Bank cash) of the southern part of the island is Financial services and tourism and most of the tourists are there to mix business (checking their accounts, meeting their bankers and stay at their houses) and fun...

so if what is feared happens and expatriates start exiting physically and/or moneywise the island, the working class of the country will be directly hit and they will lose minimum half their GDP(/capita).

You see, in one way or another the Cypriot man on the street is being punished with this decision.

Now, having clarified the situation and seen that last night's decision was by no means a SOLUTION, let's reflect on whether there could be another way...

Actually from day one, there was ONE and only ONE solution (in the mid term if not in short term) and this was an exit from the eurozone, going back to Cyprus Lira and keeping their tax haven status in the eyes of international investors tired of paying taxes.

In this case, a 40-50% devaluation and of course a huge GDP hit would be inevitable...

BUT

These effects would be there for 3 or 4 years, only.

AND

Cyprus could go on doing what they did the best before they entered the EZ; namely a friendly and confident banking business and a nice hospitality based tourism..

while now, once having bowed to the Troika and practically ended the Tax Haven business scheme, they will lose a huge bunch of their GDP sources sooner and later and they will go on taking hits from other crises of Europe which are pretty soon to come (Slovenia, Italy, Spain, France, etc...)

The key learning and action point out of this sad story is:

Haloumi cheese is always a better investment than untangible and uncontrollable schemes (interest income, forex, stock markets etc...) so the long term solution to all economies is to go back to basics and nourish real economy and production.

"Cyprus bailout" or "What is robbery in Greek?"

So, let me get this right....

Cyprus asks for more bailout money from EU and EU (or should I say Germany?) puts a "haircut" condition on the "promissory notes"...

In other words, European Union wants to charge a 10% upfront FEE for this LOAN, which will be paid by the depositors in a withholding manner!

Greek Cypriots -having a well established "Barber" tradition along with their Turkish neighbors-, knowing the difference between a haircut and amputation, run to the banks to save their money (whatever is left there) and as a measure against an instant drainage, the Government declares a bank holiday to be extended if necessary...which means; you as a depositor, cannot go and withdraw the money which belongs to YOU, before the government who lost its money and asked for a bailout without YOU involved, lets you do so! Apparently, the government hopes the depositors to have a memory span of 3 days...

and YES, this is all happening in the 21st century in the middle (all right all right, slightly to the south of the center!) of the Europe...

I will not go into my favourite subject of "How North Europeans poisoned South Europeans with their lifestyle of consuming more than one needs" on this already boring and depressive Monday morning...but let me say a couple of words on how 360 degrees ugly and stupid this is!

Endless meetings, summits, BASEL's, Draghi Talks...and the best you can come up with is a criminal style unlawful interest paid upfront???

Even good old pawnbrokers had more ethics than Brussels!!!

Once again we see how reckless POWER can be when it comes to money...

Ok, I can see some of you murmuring "what the heck, most of it is grey or black money flowing from Russia, CIS or Slavic oligarchs...let them live with it..."

Here is what I have to say...

ONE: Didn't the Greek Cypriot government have enough time (about 20 years or more) to realize the unsustainable nature of this banking business and/or the source of this money?

TWO: Didn't the European Union know the systemic problems of the Southern Cyprus Economy and Banking system when they welcame them with an unresolved issue with the Northern Neighbors who had almost everything it takes to diversify the Southern economy which exclusively lived on the deposits and sex money from the Slavic speaking BIG BRO's?

THREE: Really? So now the working class (white/blue collar workers) and the farmers should pay for somebody else's fault?

Another bit of topic to laugh on the subject was on the Turkish Newpapers published this weekend...

The Finance Minister of Turkish Republic of Northern Cyprus (believe it or not, there is such a country!) declared that the border and customs controls will be intensified to block the flow of money from Southern Cyprus in suitcases...He said they were receiving many calls from especially English depositors who wanted to learn if it was possible to bring money to Northern Cyprus Banks from South...AWFULLLL, isn't it?!

God, I love groundless pride based on rough nationalism...

Mr. Minister, get a life, will you?! Your passport is not recognized anywhere on the world, every year you're dumping tonnes of oranges (leftover after selling everything to Turkey, who is the only legal trade partner) to the mediterranean sea and you live almsot exclusively on the Turkish government grants and gambler money.....and you do not want money in suitcases??? How do you think people will be interested to bring in money when it takes at least two money transfer stops (and commissions thereof) before the money can come from 10 kms away?

This is ugly, this is stupid and yes, this is black funny!

You are naive, if you believe the aftermath of this will only be felt on this island....

I am almost 100% sure that we will see queues in fron of ATM's and Bank branches today at least in Athens, Madrid, Lisbon...

Now, anybody who reads newspapers or watch tv in Europe with deposits in European banks know that one morning they can simply wake up 10% poorer and they know, this is just the beginning...and at the end of the day, this is a UNION, right?

This will be a long long week....