Dec 12, 2008

Who engineered this financial crisis?

Some say the financial crisis was caused by lending to people who did not have the capacity to pay their loans back. Some say it was caused by greedy investment bankers hankering after million dollar bonuses. Some say it is light regulations which allowed i-banks to over-leverage.

Bullshit.

The crisis was caused because finance firms started hiring more and more engineers instead of the sticking to the traditional accountants.

I have nothing personal against engineers. (or maybe, I do...)

I feel engineers form a very useful part of the the world we live. Who else could build all those roads and bridges, who else could write code so that I can write crap and hit 'publish', who else could make those sexy cars... but the trouble starts when engineers start poking their slide-rulers into areas that they don't understand.

Engineering students are people who take things literally. They apply logic where it shouldn't be applied.

Like this engineer who was asked to write a note on the difference between Equity and Preference Capital.

He wrote, "Equity means a sense of fair play, where one does not discriminate. It means that if the Fed bails out Bear Sterns, it will put money in Lehman Brothers in the name of Equity. Preference Capital means giving shares to investors whom we have a preference for. So, Goldman will give wonderful terms to preferred investors like Warren Buffet."

Or take the case of another brilliant visionary who was asked to give the difference between Long Term Debt and Short Term Debt.

He wrote, "Long Term Debt is the next management's headache. Short Term Debt is the current Government's headache."

He also claimed, "Secured Debt is that which is already tied up, while Unsecured Debt is that which has been let loose." That is another problem with engineers, they are always showing off their brilliance.

I also bumped into this genius from Calcutta who said Debenture Capital need not pay fixed returns because De-benture Capitalists (or BeeCee s) are those who inbest in small start-ups in the hope of selling out when the company grows and don't mind losing money on a deal or two. He hoped to find a BC who can provide seed capital to his latest inbention.

And then, there was this Mech. stud-boy who thought Fixed Assets are those that have been repaired. And the same guy argues with me that Intangible Assets cannot be part of the Fixed Assets, because no even the smartest IITian can fix something which cannot be seen.

And did I mention that Electrical Engineer who considered himself an expert on Current Assets? He said that he could even create a charge on those assets any time the company wants a loan.

One guy, a successful supply chain manager, kept asking that if Stock is an asset, how can Provisions be a liability? "After all, what do you call those provisions which are stocked in your kitchen," he asked smartly.

These engineers I tell you!!!

That's why my prescription for solving the global financial crisis doesn't involve trillion dollar bail-outs, or interest rate cuts.

Just ensure that the logical engineers get the bloody hell out of finance and go back to laying roads and writing code. I can bet my last worthless share on the fact that no team of boring accountants could have come up with exotic derivatives. We accounting guys don't do anything exotic. Or erotic. That's just the way we are.

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PS: I normally trust my readers ability to spot hidden (and not so hidden) bad puns. However, in the remote likelihood that some of the people who read this could be engineers, I have highlighted some bad puns through italics.

PS: For Engineers Only: And no, italics is NOT something from Italy. It is when you write text in a 85 degree angle. Like this.

11 comments:

  1. onnum purila. im an engineer :D
    "italics is NOT something from Italy. " hahahahaaha

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  2. @ RR:

    "onnum purila. im an engineer :D"

    another failing of engineers! they are proud to proclaim their ignorance too!!! :D

    and finally, some one who is kind enuf to ha ha ha on my faltoo PJs... tnk u

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  3. kalakkitta maams

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  4. @ Monk:
    a comment in italics :)
    but i din get the intended pun :(

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  5. but see, that's not a failing. atleast we aren't too proud to proclaim our ignorance.

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  6. i dont go around explaining my pjs... ;)

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  7. @ RR:
    thank god for small mercies...

    @ Monk:
    ouch!!!

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  8. Kamal9:11 AM

    My comment... no comments :P

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  9. @ Kamal:
    I just realized that most of my readers are engineers...
    no wonder my writing is so crappy... like Ekta Kapoor, i jus give what the market demands!!!

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  10. Loved the puns ... think wud ve got most of them without the italics from Italy (the 85 degree was more engineeresque than Italy i think :P)despite being an engineer.

    I m sure you get more appreciation for your humor from engineers than the "usually" straitjacket accountants :D

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  11. @ Roshan:
    It says more about the engineers' sense of humour that they choose to waste time here...

    Accountants are too busy making PJs on Adam being the first accountant!!!

    ReplyDelete