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Beginner’s Guide to Running

Every Friday is Health Tip Day at Zen Habits.

Are you just starting out as a runner, or is it something you’d like to do? From experience, I know that a beginner runner has a million questions and never enough answers. I won’t be able to answer every question here, but this should be a good starting point for anyone who wants to hit the roads.

Disclaimer: I am not a certified trainer, coach or running expert. I consider myself an intermediate runner (on the lower levels of intermediate), having spent all last year running, doing a marathon, some half marathons, 20Ks, 10Ks and 5Ks. But what I have to share is what I’ve learned along the way. Also, see a doctor before starting a new running program — I don’t want to be responsible for any heart attacks!

Most Important Advice Many people, when the begin running, shoot for the stars. I was one of those. Let me tell you right now: hold yourself back, and start out slowly. Progress gradually. It takes some patience, but this is the best advice I can give you, and I know that it’s important because of experience.

It’s best to start out very easy, at a slow jog, and focus not on intensity but on how long you’re on the road. Start out with a small amount of time — 10 minutes or 20 minutes, depending on where you are — and run or walk/run comfortably the entire time. Do this for the entire first week, and even two weeks if you can stand it. Gradually increase your time until you can run 30 minutes.

From there, you can stay at 30 minutes or increase the amount of time you run gradually, every two weeks. But do not overdo it in the beginning!

Walk and Run Plan If you are a true beginner, and cannot run for 10 minutes, you should start out with a walk/run plan. Here’s a good one to start with (do each one three times a week):

1. Week 1: Walk for 10 minutes. Jog slowly for 1 minute, and then walk for 1 minute. Repeat these 1/1 intervals for 10 minutes, or until you become uncomfortable. Walk for 5 minutes to cool down.
2. Week 2: Walk for 10 minutes. Jog slowly for 2 minutes, and then walk for 2 minutes. Repeat these 2/2 intervals for 10 minutes, or until you become uncomfortable. Walk for 5 minutes to cool down.
3. Week 3: Walk for 10 minutes. Jog slowly for 3 minutes, and then walk for 2 minutes. Repeat these 3/2 intervals for 15 minutes, or until you become uncomfortable. Walk for 5 minutes to cool down.
4. Week 4: Walk for 10 minutes. Jog slowly for 5 minutes, and then walk for 2 minutes. Repeat these 5/2 intervals for 20 minutes, or until you become uncomfortable. Walk for 5 minutes to cool down.

You get the picture. The idea is to gradually increase your running time until you can do 10 minutes straight. Then increase the 10 minutes to 12, and so on, each week, until you can eventually run for 30 minutes. Now you’re a runner! Online forums In the beginning, you’ll have a lot of questions and want to share your progress with others. An online forum is perfect for that. Join a forum or two, read as much as you can, introduce yourself, post your questions, post your weekly progress, and gain from the experience of others.

A few good forums to start with:

• Cool Running forums
• Runner’s World forums
• About.com runner’s forums

Make it a habit If you struggle with making running a regular habit, try doing it every single day at the same time. Habits are easiest to form if you do them consistently. This may sound contradictory to some of the advice above about starting slowly, but the key is to go very easy in the beginning — nothing that will stress your body out or make you sore the next day. Also, instead of running every day, you could swim or bike or do strength training, so that your running muscles are given a rest while you continue to form your exercise habit. See How to Make Exercise a Daily Habit for more.

Most important advice: just lace up your shoes, and get out the door. After that, it’s cake.

The importance of rest Some runners try to go hard every single day. They are ignoring the truth about muscles — your muscles grow by giving them stress, and allowing them to rest after the stress so that they can grow. If you run hard every day, you will just continually break your muscles down, and improvement will be slow and difficult — and it could lead to burnout or injury.

It’s best to rest the day after a tough run, to allow your body to recover. Does this mean you should rest completely, with no running or exercise at all? Not necessarily. The important thing is that you don’t run hard two days in a row. But you can do a very easy, short run (or other type of easy exercise) in between harder runs and still allow your muscles to recover.

First 5K One of the most motivating things in running is an upcoming race. I suggest you sign up for a 5K after a month or two of running, even if you don’t think you’re ready. Why? It will motivate you to keep running, so that you’re prepared to do the 5K.

Now, some people have a nervousness about signing up for a running race, because the other runners are so much better than them. Relax. There are plenty of very good runners in every race, but there are also many beginners. Don’t worry about the other runners. There’s usually so many people at a 5K that you won’t be noticed. And don’t be afraid to walk or run/walk. Many, many other people do. Just run your own race, and most importantly, have fun! It’s a blast.

On manners: do not start out a race in the front, unless you think you can win it. Slower runners should start in the back, or they get in everyone’s way. Also, stay to the right, so people can pass you. Try to be courteous, and not push or cut someone off. Watch out when you spit — you might hit someone behind you. Same thing with snotrockets. And when you beat that little 11-year-old girl at the finish line, it’s best not to point at her and yell “Loser!” repeatedly. Trust me. I speak from experience.

Once you do your first 5K, you’ll be hooked. That’s a warning.

Equipment So what do you need to run? Well, running shorts, shirt and shoes, basically. Women will need a sports bra (get a good one, trust me). Should you go out and buy the best running clothes and shoes possible, even before your first run? No, it’s not really necessary. You can get started running with any pair of comfortable sneakers and any shorts and T-shirt.

But once you really get into it, you’ll want to buy some real running clothes — breathable fibers, with some comfortable underwear built in (not cotton!) so you don’t chafe. A running shirt is also good. If you live in cold weather, you’ll need some breathable clothes to put over your shorts and shirt. I live in the tropics, so I can’t advise you here.

Most important: good running shoes. This is the most important running equipment, because it can not only make running more comfortable, but also prevent injury. My advice is to go to an actual running store, where there will be knowledgeable people who can watch you run and tell you what kind of shoe you need (overpronator, supinator, neutral, etc.). If they don’t watch you run, they don’t know what they’re doing. Get out and find a better store. Or do your own research online and learn all about it.

Other things that you might consider, but that aren’t completely necessary:

• Reflectors and flashing lights if you run when it’s still dark.
• Body glide, or Vaseline, applied in the crotch, underarms, and anywhere you might chafe — really only important for longer runs.
• Heart Rate Monitor: Best ones are by Polar. You can get fancy ones, with GPS built in, or just a simple one that tells you your heart rate. This is useful if you do HR training, which is a way of optimizing your training. Probably not necessary for beginners.
• Mp3 player: Also not necessary, but pretty cool and can add some inspiration to your running. However, if you run on the road, headphones can be dangerous, as you might not hear traffic coming your way.
• Fuel belt or Camelback: A way to keep yourself hydrated while you run. Not necessary for short runs. Also, for longer runs (60 mins or more), I just place water bottles along my route.

Mechanics I can’t advise you here, as I’m not a trainer. But most of the time, you don’t have to worry about this. Just try not to fall down. One thing to watch out for is how tense your upper body is — try to relax your shoulders, relax your hands, relax everything but the muscles needed to propel your body forward. The reason is that you may be using extra energy (and tire yourself out faster) if you’re running with your fists clenched, for example.

Later, after you get past the beginning stage, you can worry about stride length or turnover rate. But for now, just worry about getting out there.

Pain I also can’t advise you on injuries. Unless you have sharp pains, or pain in the joints, you should be able to run through minor aches. But if you have anything sharp, or your joints feel injured, stop running. You could make it worse.

The runner’s best friend is ice, and rest. In fact, it’s good to ice your muscles and joints down after every run, if you can. It helps with the healing process. Aspirin or Ibuprofen are also good tools, also to help stop inflammation.

Going beyond beginner Once you’ve gotten a few 5Ks under your belt, and have been running for a few months, you’ll want to start a real training plan and progress to the next level. Training plans are available online for free (see some of the sites below). I’ll try to do a guide for intermediate runners next.

14 Stress-Free Ways to Kick Weight Loss in the Butt

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Habit is habit and not to be flung out of the window by any man, but coaxed downstairs a step at a time. - Mark Twain

Let’s be honest: Losing weight isn’t the easiest thing in the world. All our best intentions end up doing nothing.

And I’ve tried just about every diet plan out there, from the various low-carb diets to Weight Watchers (which isn’t bad, actually) to the Abs Diet to Slim Fast to low-calorie to low-fat and more. I’ve tried a bunch of exercise programs too, believe me.

My weight-loss efforts these last couple of years have been hit-and-miss, as I’ve struggled to find something that works for me. Recently, I think I’ve been hitting upon some pretty simple concepts that really work, for me at least.

You might have read the Zen Habits Meal Plan, which is actually a pretty good plan. But let me take some of those concepts and simplify them a little more, for some (almost) easy ways to beat your weight-loss struggles. These are mostly the same concepts, but I’m reporting what has been working for me as I experiment with the meal plan.

Let me be honest again: even with the concepts below, weight loss isn’t going to be easy. But at least these tools will make it a little easier, a little simpler, and they really do work.

I’ve lost 15 pounds in the last few months, which isn’t rapid weight loss but is actually a very healthy rate of loss. I recommend gradual weight loss for everyone. At the rate I’m going, you can lose 50 pounds a year. I don’t need to lose 50 pounds anymore (I did at one time, but only have about 20 pounds to go), but after I lose the rest of the unwanted bodyfat, I’m going to focus more on building a little muscle (something I’m actually doing now but it’s not my main focus).

Never eat more than you can lift. - Miss Piggy

1. Focus on gradual loss. I mentioned this above, but it’s important. Too many people focus on trying to lose weight fast — 10 pounds in 4 weeks, 20 pounds in 2 months, etc. It’s not healthy, and it doesn’t work, because even if you are able to lose that much weight that fast, you haven’t learned sustainable eating habits that will last you a lifetime. The key is to figure out an eating pattern than will work for you for the rest of your life. Again, if you focus on losing 1-2 pounds per week, you will lose between 50-100 pounds per year. You just have to be willing to wait a year, but trust me, a year goes by pretty fast these days (I think it’s inflation or something).

2. Focus on nutrition. Exercise is important. You have to do it. It has wonderful benefits. But if your focus is on weight loss, the most important factor is what you eat. Don’t ignore exercise, by any means, but if you focus on exercise and think you can eat whatever you want, you’re wrong. You have to focus on nutrition (what you eat) and use exercise as a way to supplement the calorie burn and to get your body looking how you want it to look (not to mention as a key way to get healthy and feel great).

The reason: you can change how many calories you take in to a much greater degree than you can change how many calories you burn. Thirty minutes of exercise, for example, can burn less than a medium McDonald’s fries. Lose the fries, and you’ve done in a few seconds what would take 30 minutes of exercise to accomplish.

3. Become aware of your hunger. This is one of the key things I’ve been learning. Many times we are not conscious of how hungry we are. We ignore our bodies because we’re too busy thinking about other things. As a result, we only eat when we’re famished, and that’s not a good time to eat, because you don’t make healthy eating decisions when you’re super hungry. Your blood-sugar level is too low, and your body just wants a quick sugar fix — a donut or some cookies or white bread or a Coke will be much more appealing than a salad or healthy sandwich on whole grain bread.

Learn to listen to your body, and be aware of your hunger when it’s in its early stages. This is a key skill to weight loss, something the other plans don’t tell you about. They tell you what to eat and when, but don’t teach you how to use your body’s signals to learn to eat healthier.

4. Eat when you’re hungry, not famished. When you first feel the hunger, that’s when to eat. Don’t put it off until the hunger builds into an insatiable monster. When you start to get a little hungry, eat a snack. You don’t need to eat a full-on meal … just some fruit, some crackers, maybe some low-fat dairy (cheese or yogurt or cottage cheese — although I prefer soy yogurt), oatmeal, some nuts, dried fruit, etc. Just something to tide you over until you feel hungry again, or until you can eat a bigger meal. Keep healthy snacks at your desk or in your car or wherever you go. I like to pack some in the morning.

The corollary to this is to also allow yourself to eat what you crave. I know this is contrary to most advice, but I’ve found that it’s important to listen to your body … not only when your body is hungry, but when your body is craving a specific food. I’ve also found that often your body just wants a taste of that food (see No. 13 below) and if you give your body what it wants, and really pay attention to the taste and texture of the food and how you feel after you eat it, you will probably crave that food less and less. 5. Learn to eat until satiated. Again, pay attention to your body as you eat. If you eat mindlessly, you will most likely overeat. You’ll just keep cramming food into yourself until you’ve eaten too much. We’ve all felt the pain of being overstuffed. Don’t allow that to happen — be mindful of your eating, and of your hunger.

A good habit to build is to eat slowly … and take pauses, so you can think about whether you’re really still hungry … and drink lots of water during those pauses. This style of eating will allow you to stop eating when you’re satiated (when your hunger is satisfied, not when you’re stuffed) and allow you to be satiated by eating less. It’s not easy at first, but once you’ve practiced it for a week or two, it will make a huge difference in the amount you eat.

Another thing: before you go back for seconds, stop and take a break for a few minutes. Drink some water, talk to somebody, read, go do something, clean the kitchen a little. Whatever it takes. Often you’ll find that you really didn’t need the seconds. And then you’ve saved yourself a few hundred calories.

6. Drink lots of water. I mentioned this above, but drinking water throughout the day helps you to eat less. Water takes the place of food in your stomach. You’ll still need to eat, but if you stay hydrated you’ll get hungry less. Keep a bottle of water with you at all times.

7. Keep healthy options available. A good trick is to clear your fridge and cabinets of all unhealthy snacks and foods. Just dump them. Then plan some healthy breakfasts, lunches, dinners, snacks, and go shopping. Bring healthy foods to work and wherever you go. Always have some fruits and nuts and other healthy options by your side. If you do this, and eat when you’re hungry, you’ll eat the unhealthy stuff much, much less.

8. You gotta log. This may sound difficult to those of you who hate to log stuff or who only do it for a couple days and then stop … but it’s really not that hard once you get used to it. And if you use a very easy log (and one that’s accountable — see next item), it’s even easier. The reason you need to log is because most people underestimate the amount of calories they’re taking in. They don’t think the sweet drinks or the little snacks make any difference, but they really add up. Log everything that goes into your mouth, and you’ll really see how much you’re taking in. The act of logging makes you more aware, and that awareness, that mindfulness, is what allows you to eat less and be healthier.

9. Be accountable. Perhaps the greatest motivator of all is allowing others to see your log. That’s why I like using PeerTrainer, although other good logs (such as Fit Day, Spark People, Calorie Count, etc.) can also be used this way. PeerTrainer allows a small group of people to log easily and take a look at the other logs in the group. Whatever tool you use, get a partner or a small group that monitors each other’s logs, and you’ll be very motivated to eat well and exercise.

10. Find a workout partner. This is accountability done right. A good workout partner is someone who wants to workout at the same time as you and do a similar workout, and someone whose company you enjoy. Why it works: if you set an appointment with a workout partner, you won’t want to miss it. You’ll make sure you’re there, unlike when you work out by yourself — many people are very tempted just to cancel their workouts if they’re a little tired or busy. Also, a workout partner makes the workout a little more fun, and that’s always a good thing. If you get a workout partner, you will have a stress-free exercise plan that will compliment your healthy eating perfectly. Try for 3-5 workouts per week, giving yourself plenty of rest time after hard workouts.

11. Allow yourself to cheat. A strict diet plan is a bad one. If you are severely restricting yourself, and you feel deprived of good foods, you won’t last long. Trust me, I’ve tried it many times. Instead, relax a little bit, giving yourself a cheat meal or two each week, and allowing yourself to cheat a little on special occasions. It’s still best if you can go for the healthier foods on special occasions, but don’t be too strict.

12. Three-bite rule. A great way to allow for cheats is the Three-bite rule … basically, if you want a sweet or some other sinful food, don’t deny yourself … allow yourself a little indulgence, but just three bites. Allow yourself to enjoy the taste, eat slowly, then move on to healthier foods.

13. Forgive, and move on. If you make a mistake, or cheat more than you should, don’t just give up or beat yourself up. This kind of negative thinking is why people don’t stay on diets for long. They binge and then go back to their unhealthy habits. Instead, just forgive yourself for any indulgences, and get back on your healthy eating plan. Look forward, not backward.

14. Get inspired. Motivation is important … maybe the most important thing. Accountability (mentioned above) is the best motivator … but I’d put inspiration at a close second. Find others who are doing what you want to do, read success stories, read magazines and blogs and books, put up a motivational poster … whatever it takes to get inspired.

Benjamin Graham - Investment Quotes

hi, if you find this massage is interesting, share with your friends * You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right." Investing and Emotions * "Individuals who cannot master their emotions are ill-suited to profit from the investment process." * "Most of the time common stocks are subject to irrational and excessive price fluctuations in both directions as the consequence of the ingrained tendency of most people to speculate or gamble...to give way to hope, fear and greed." Sense of Humour * Warren Buffett, story from Benjamin Graham: A story that was passed down from Ben Graham illustrates the lemminglike behavior of the crowd: "Let me tell you the story of the oil prospector who met St. Peter at the Pearly Gates. When told his occupation, St. Peter said, “Oh, I’m really sorry. You seem to meet all the tests to get into heaven. But we’ve got a terrible problem. See that pen over there? That’s where we keep the oil prospectors waiting to get into heaven. And it’s filled—we haven’t got room for even one more.” The oil prospector thought for a minute and said, “Would you mind if I just said four words to those folks?” “I can’t see any harm in that,” said St. Pete. So the old-timer cupped his hands and yelled out, “Oil discovered in hell!” Immediately, the oil prospectors wrenched the lock off the door of the pen and out they flew, flapping their wings as hard as they could for the lower regions. “You know, that’s a pretty good trick,” St. Pete said. “Move in. The place is yours. You’ve got plenty of room.” The old fellow scratched his head and said, “No. If you don’t mind, I think I’ll go along with the rest of ’em. There may be some truth to that rumor after all."

Warren Buffet's Secrets of Sucess

hi, if you find this massage is interesting, share with your friends Warren Buffet's Secrets of Sucess 'Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it.' • 'The investor of today does not profit from yesterday's growth.' • 'Of the billionaires I have known, money just brings out the basic traits in them. If they were jerks before they had money, they are simply jerks with a billion dollars.' • 'I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.' • 'I don't look to jump over 7-foot bars: I look around for 1-foot bars that I can step over.' • 'I always knew I was going to be rich. I don't think I ever doubted it for a minute.' • 'We enjoy the process far more than the proceeds.' • 'You do things when the opportunities come along. I've had periods in my life when I've had a bundle of ideas come along, and I've had long dry spells. If I get an idea next week, I'll do something. If not, I won't do a damn thing.' • 'I buy expensive suits. They just look cheap on me.' • 'Let blockheads read what blockheads wrote.' • 'I do not like debt and do not like to invest in companies that have too much debt, particularly long-term debt. With long-term debt, increases in interest rates can drastically affect company profits and make future cash flows less predictable.' • 'My grandfather would sell me Wrigley's chewing gum and I would go door to door around my neighbourhood selling it. He also sold me a Coca-Cola for a quarter and I would sell it for a nickel each in the neighbourhood, so I made a small profit. I was always trying to do something like this.' • 'A public-opinion poll is no substitute for thought.'

The silent army

hi, if you find this massage is interesting, share with your friends There are more than 1 million Non Profit Organisations (NPOs) currently operating in this country. The majority are based or focused on rural India. More than 20 million people are actively engaged with these NPOs. Only a fifth of this workforce is on a paid basis! These organizations are active in a number of areas that include community service, education, sport and health to name a few. What fascinates me is that more than 40 % of Indian households give; many of these being in rural areas or from the lower income groups. The problems we are faced with are mammoth. A large part of our billion plus population consumes less than a US Dollar a day. Levels of literacy though improving still leave much to be desired - we have the unfortunate distinction of having amongst the lowest levels of female literacy in Asia. I could go on but wouldn't be telling you anything you don't already know. This paper is simply an appeal. It is a request to all of us who have a little more than the average to actively engage in giving back. There are many ways to do so. But it is important for each of us to develop a social mission so that capability, skill and resource can be best utilized. This is something the corporate sector can lead. In fact, some companies already do this well. They have clearly articulated their areas of focus. Quite often this is complimentary to their core business; and that is a good thing. It enables them to leverage existing assets, which in turn ensures an efficient program. Many companies encourage their employees to engage in social programs - these could range from company sponsored projects or simple payroll giving to approved charities with a matching contribution by the employer. Increasingly, activity of this nature is an important attribute that appeals to people looking for jobs. A big benefit of this is the impact on employees. There are many examples of great giving habits that people have formed at the workplace that have then influenced their actions in other arenas. Many of the NPOs operating today are unregistered and small. They have limited access to talent with proven business acumen and leadership. They are ploughing ahead despite these handicaps often driven by the sheer energy and will of their founder members. These NPOs could do with help and it's not just money. They need people who can bring diverse skills beyond what the original promoters may possess. There is much that isn't shining in our country. And we don't need the metrics of shame that talk of extreme poverty or of child mortality to galvanise us into action. Look around and there is a cause to fight for - the young ball picker at the tennis club who doesn't go to school or in the neighbourhood, the mistreated domestic worker. There is a silent army out there. These are folks like you and me. They are fighting a tremendous battle every day. This is a call to sign up.

5 Little Known Female Orgasm Secrets

hi, if you find this massage is interesting, share with your friends Sex Tips & Advice - 5 Little Known Female Orgasm Secrets Pages: 1 2 The biggest mistake when it comes to "giving women orgasms" is focus on the "how-to" techniques without paying proper attention to the best mind-set and strategies to make her climax. In reality, the strategies are the key to unlocking the power of the techniques. You’ll understand that while the techniques by itself can be effective, the mind-numbing, noisy, wet, toe-curling orgasms lies largely in the strategy you use when applying the techniques. Mindset Your state of mind (and your partners’) can really make or break the chances of her having an orgasm. The Wrong Mindset How do you approach your lover’s orgasms? You probably enter into sex with the mindset and goal of "giving an orgasm." It’s this approach that leads too many guys on a wild goose chase for the "perfect" strokes and techniques. It leaves you blindly seeking out every tip and trick out there, furiously testing them out on your lover. I hate to break it to you, but this is the wrong mindset if you truly want to "give" an orgasm. It sounds contradictory, I know. But it’s true, and here’s why… When you head into the bedroom with the goal of "giving" her an orgasm, you’re setting up expectations in both of your minds. This approach will create pressure on both you and your partner that an orgasm MUST happen. Once you add pressure to have an orgasm, it is virtually guaranteed to add some negative stress and anxiety during your intimate times together. And…as this stress grows, it will actually make it much harder for her to cum. Have you ever seen a football or basketball player "choke up" during a game? The fans, the crowds, the competition build up so much pressure for the athlete to perform well that their focus is diverted from the game and to their anxieties. Ultimately, they wind up screwing up. Too much focus and drive on your part to "give" an orgasm can have the same effect on your partner. Effects of Stress on Your Partner If the stress and pressure get too high, she may be left unsatisfied. And because you have set this "goal" to have an orgasm in a first place, and now that the goal is un-met, both you and your partner will be left feeling disappointed. If this approach is sustained, you may wind up anchoring these feelings of disappointment to your times of physical intimacy - carrying it over into your next sexual encounter, further increasing her "performance anxiety." The Right Mindset Here’s the paradox… If you want to give an orgasm, you have to NOT focus on the orgasm! Instead of focusing on the goal of achieving an orgasm, start focusing your attention on the pleasure of the process. The key is, if you focus on giving pleasure, and making sure she’s feeling good, that orgasm will come (no pun intended.) Communication Not every technique will work on every woman. One woman may prefer one particular stroke or rhythm more than the next woman does. To find out what really makes your woman tick, you’ve got to open the lines of communication. You need to find out what she likes as you’re applying a technique. That way, you can optimize your rhythm, speed, stroke etc. to match what she likes best. Aim for open verbal communication, but if your lover isn’t as brave speaking her mind (especially when you’re face is buried between her thighs) you can opt for more non-verbal communicative methods, such as squeezing hands or body response. Communicating well with your partner can make it much easier to bring her pleasure, and ultimately, more and better orgasms.

US recession a solution, not a problem

hi, if you find this massage is interesting, share with your friends US recession a solution, not a problem How long and hard will the US recession be, and how badly will it affect India? Analysis of that issue has currently been hijacked by the sensational events in the US stock market, mirrored by gyrations in Indian markets. The markets surged upward in a burst of optimism at the beginning of this week. Yet this froth will soon be forgotten. We have to deal with the more fundamental problem of US household overspending. Reducing this overspending is both desirable and, ultimately, inevitable. And it will be recessionary. Last week, the collapse of one of the biggest US investment banks, Bear Stearns, was followed by its takeover by JP Morgan Chase, brokered and underwritten by the Federal Reserve Board. The immediate stock market reaction was that many more financial stalwarts might go the way of Bear Stearns, and the markets plunged. Indeed, many observers pointed out that the Fed might not be able to tackle the crisis through interest rate cuts and provision of additional liquidity, since the underlying problem was lack of trust. The huge market for mortgage-backed securities and derivatives had suddenly frozen and stopped functioning because many of the biggest traders in the market were tainted with the risk of default. Bear Stearns showed that not even the biggest actors could be trusted to fulfil deals. The stock market slumped at the prospect of more firms going the way of bear Stearns. But soon afterwards, market staged a recovery on hopes that the Fed had fully understood the problem of frozen markets, and was willing to implement highly unconventional measures to solve the problem. Some economists had earlier proclaimed that, to clear the logjam in the market, the Fed itself would have to emerge as a market buyer, and perhaps even become a market maker in some categories of mortgage-backed securities. The rescue of Bear Stearns, with the Fed guaranteeing $30 billion worth of mortgage backed securities, is in effect a step in this direction. The entry of a buyer who cannot default — the Fed can always print notes to meet any financial commitment has the potential to unfreeze frozen markets. By making trades possible and safe, this provides actual prices in a functioning market, in place of guesses about the true price in a frozen market. Of course, the Fed has assumed risks that should really be assumed by financial firms, and so market purists are shocked. But others say the need of the hour is to restore normalcy in frozen markets, so this is a worthwhile short-term fix. Public rescues should be funded by the taxpayer through the US Congress, not the monetary authority. Remember, it was the legislature, heeding the urgings of President Bush Sr, that created the Resolution Trust Corporation that funded the cleaning-up costs of the savings and-loan bust of the 1980s. Something similar may happen this time too. In any event, Congress is already working on Bills to partially rescue both lenders and borrowers in the housing market. Over and above that, Congress has enacted an economic stimulus programme, entailing the posting of cheques worth almost $150 billion to all taxpayers, which should be implemented in June. That will pump a lot of purchasing power into a flagging economy. And so, optimists believe that the worst is over, and that explains why the markets have started climbing again. They hope that the financial crisis is being resolved by both the Fed and Congress, that frozen markets will unfreeze and confidence will return to all markets. This in turn is fuelling hopes that the economy will revive in the second half of 2008. The aim of US policymakers right now is to avoid an outright recession (defined as quarter-on-quarter declines in GDO for two successive quarters), or at least keep a recession short and mild. The political imperatives for this are strong, obviously. Indian policymakers would love to see a quick end to the US financial-sector crisis, which in turn will end the strain imposed by the crisis on the Indian and world economy. Yet this is a myopic approach attempting to sustain the unsustainable. The underlying problem is that US households have for years been spending more than their income. The macroeconomic consequence is a huge current account deficit of $700 billion/year, financed by borrowing from abroad. Burdened now with trillions of dollars of debt, even the richest and most creditworthy country in the world is now suffering a falling currency, causing pain through inflation. US overspending is not sustainable, and will at some point have to be reduced drastically, if not eliminated. Seen in this light, a recession is a solution to US overspending, not a problem. A recession reduces spending and borrowing, and thus helps restore economic equilibrium. The world economy will inevitably slow down along with the US. But countries like India will still be able to attain GDP growth of 7%, lower than the 8.8% of the last four years, but still extremely high by historical standards. Possibly, the Fed and US Congress will manage to keep the coming recession short and mild. They have powerful monetary and fiscal tools at their disposal. But short-term success will simply mean postponing the day of reckoning on over-spending. That will in time lead to new crises and further recessions. Pessimists predict worse outcomes. Kenneth Rogoff, former chief economist of the IMF, believes that the US recession will be long and deep, not short and shallow. An increasing number of forecasters believe that house prices in the US have a long way to fall, and may fall another 20%, over and above the 9% fall to date. That looks too pessimistic to me, but if it happens, it will surely abort any early recovery. In sum, Indian investors should not get euphoric about the latest actions of the US Fed and Congress to unfreeze markets and stimulate the economy. Any success on their part is likely to be partial, and short-lived. The era of mammoth US trade deficits fuelling record growth round the world — including in India is coming to an end. We need to adjust to this new reality.

How BRICs have changed the world

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In 2001, Goldman Sachs came out with the concept of the BRICs - Brazil, Russia, India China - as high-population countries that would dominate the world economy by 2050. At the time, global financiers sneered that this was a facile formulation to get business from the gullible. Very little global finance trickled into the stock markets of the four countries in 2001. Seven years later, the BRICs have outperformed the most optimistic projections. Goldman Sachs had predicted that these countries would account for 10% of world GDP by the end of the decade. They have already crossed 15%. Analysts have offered various explanations for their success. Let me suggest one more. Without consultation or planning, the BRICs have stumbled into a four-way division of labour yielding huge gains in productivity and synergy. Also Read à India, China private business owners upbeat on M&As à The rise of the BRIC countries à BRIC nations to drive global steel growth: IISI à BRIC nations mop up $40 bn via syndicated loans till March China has specialised in manufacturing. India has specialised in service exports. Russia has specialised in energy. And Brazil has specialised in other commodities (iron ore, sugar, ethanol, soyabeans, beef, orange juice). All four have become world-beaters in their respective specialisations. Of the four, only China looked remotely like a champion in 2001, and it too was struggling with social discord in interior provinces that had missed the great export boom. In 2001, Russia was in financial straits after defaulting on its external debt in 1998, Putin was struggling to re-establish Moscow’s control over the provinces, and the price of oil was just $18/barrel. India’s growth rate had plunged after 1997, and in 2001 was down to the 5.8% level of the 1980s. Brazil had barely overcome its financial crisis of 1998. Seven years later, the BRICs have exceeded all projections. China contributed more last year to incremental world GDP than even the United States, whose economy in absolute terms is four times bigger. India has averaged almost 9% growth for several years. Russia has become an energy superpower, and in place of its huge current account deficit in 2001, it now has a huge surplus approaching $200 billion a year. Brazil, with 5.4% growth, is the slowest of the four, yet is among the few countries that looks like growing strongly even in the coming global recession. Few Indians realise how dominant Russia has become in energy. I am sure 99% of readers think Saudi Arabia is the world’s biggest oil producer. Wrong. Saudi Arabia has the biggest oil reserves by far. But in terms of production, Russia at 10.1 million barrels/day beats Saudi Arabia’s 9.3 million barrels/day

India to join 'economic miracle' group: UK think-tank

hi, if you find this massage is interesting, share with your friends India to join 'economic miracle' group: UK think-tank EW DELHI: India is all set to join the 13-member group of 'miracle economies' that have recorded higher growth in a short span of time, says a UK-based think tank. In addition to India, Vietnam will also be joining the club of these fast-growing economies, which among others include Japan, Singapore and South Korea, the Commission on Growth and Development said. The other members of the miracle economies include Botswana, Brazil, China, Hong Kong (China), Indonesia, Malaysia, Malta, Oman, Taiwan (China) and Thailand, the Commission, which is sponsored by World Bank and governments of Australia, the Netherlands and the UK, said. Indian growth story has characteristics as the mircale economies, the report said. The miracle economies, it added, shared common characteristics as they are all engaged with the global economy, had high rates of saving and investment, and credible and capable governments. The Commission, which is headed by Nobel laureate Michael Spence, has Planning Commission deputy chairman Montek Singh Ahluwalia as one of the members. It said India's multi-party democracy has grown remarkably due to a pragmatic and impartial growth strategy and also the role of government has shifted from dismantling the excesses of the license raj to putting in more endeavours for improving the public infrastructure.

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How Indian mind works

> NOT A STORY BUT A TRUE INCIDENT THAT HAPPENED IN AMERICA > > An Indian man walks into a bank in New York City and asks for the loan > officer. He tells the loan officer that he is going to India on business for > two weeks and needs to borrow $5,000. The bank officer tells him that the > bank will need some form of security for the loan, so the Indian man hands > over the keys and documents of new Ferrari parked on the street in front of > the bank. He produces the title and everything checks out. > The loan officer agrees to accept the car as collateral for the loan. > > The bank's president and its officers all enjoy a good laugh at the Indian > for using a $250,000 Ferrari as collateral against a $5,000 loan. An > employee of the bank then drives the Ferrari into the bank's underground > garage and parks it there. > > Two weeks later, the Indian returns, repays the $5,000 and the interest, > which comes to $15.41. > > The loan officer says, "Sir, we are very happy to have had your business, > and this transaction has worked out very nicely, but we are a little > puzzled. While you were away, we checked you out and found that you are a > multi millionaire. What puzzles us is, why would you bother to borrow > "$5,000"? > > The Indian replies, "Where else in New York City can I park my car for two > weeks for only $15.41 and expect it to be there when I return". > > *Ah, the mind of the Indian... * > > *This is why India is shining *

Oil and the seven myths

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It is one of the most powerful momentum markets in history. Across the globe, almost all stocks that have outperformed the benchmarks over the past year belong to the just one group. Six out of the world's 10 largest companies by market value are drawn from this sector. Pension plans and hedge funds have been pouring record sums of money into the space. Conversations around office water coolers and living rooms revolve around the same financial topic. It is fashionable to throw about forecasts of much higher prices, which are already up 100% over the past year and are pasted on every other magazine cover. So is this early 2000 or mid-2008? The parallels are indeed striking between the late stages of the tech mania and the current oil boom. Both mega trends were rooted in a powerful economic shift; while the tech boom was associated with several technological breakthroughs and new 'killer applications' for mass use, the oil-led commodity boom is attributed to the rapid industrialisation of emerging markets. At some point, however, investor imagination begins to overstate reality. With oil prices doubling since mid-2007, without any major corresponding change in the supply-demand dynamic, there are now widespread signs that the myth has again transcended the truth. While it's hard to predict exactly when the deeply entrenched uptrend will reverse, it's important to be fully aware that psychology rather than fundamentals is currently spurring oil prices. Here are some of the most popular misconceptions that come through in any discussion about oil. Myth 1: The oil price surge is due to a drop in output growth. While there is some reason to be genuinely concerned about long-term supply constraints in oil, growth in production has not hit a wall as yet. Global oil supplies have been increasing 2% annually over the past five years and supply of crude is more than adequate to meet demand this year as well. Still, the market is worried that the dependence on OPEC supply has recently been growing as estimates for North Sea and Russian crude production have been steadily declining. In addition, global spare capacity has fallen to 2% of production from a historical average of 3% to 5%. But this hardly justifies the doubling in oil prices over the past year. The last time prices rose at such a meteoric pace was in the 1970s when there were actual supply disruptions. Myth 2: Emerging market demand is main determinant of oil prices. Unlike most other commodities, where China is indeed the price-setter, OECD demand is still the most relevant factor when it comes to oil. The US consumes 25% of global oil compared to 9% for China. US oil demand has contracted by 5% so far this year, as demand destruction is in the works. While it is hard to get a fix on latest Chinese demand, growth in oil demand is unlikely to be as high as the 5% annual run-rate of the past five years, given the marginal slowdown in China's economy. Myth 3: Emerging market demand is price inelastic. For every commodity, demand destruction sets in at some point. In the 1960s and '70s, the re-industrialisation of Japan and Europe propelled commodity prices higher, but at a certain juncture, the demand for commodities recoiled. Copper consumption peaked at 0.45% of global economy in the mid-1960s while the demand for nickel started to fall in the 1970s after reaching 0.2% of global GDP. For the previous oil price boom, the breaking point was in late 1979 when the total spend on that commodity exceeded 7% of global GDP. Over just the past ten years, the weight of oil in the global economy has moved from a low of 1.5% of GDP to over 7% of GDP again. The experience of the 1980s could be instructive in the current context as well. Even as Japan and Europe continued to grow strongly in the 1980s, oil consumption remained essentially flat through that decade as both the regions strived to achieve better fuel efficiency and switched to alternative sources of energy, such as nuclear power. With governments in many emerging markets finally raising oil prices at the retail level this year, oil demand is bound to decrease. As a case in point, the Indonesian government is budgeting a 10% decline in volume growth for 2008 on the back of a 30% adjustment in oil prices. Myth 4: Better standards of living in developing countries will only increase oil consumption. As the demand patterns of the 1980s show, when oil gets too expensive consumers look for different sources of energy and succeed in finding them. A similar move has been underway with nearly 90% of the growth since 2004 in new 'oil' capacity coming from bio-fuels, synthetic oil and natural gas liquids. Furthermore, higher per capita incomes are often associated with greater energy efficiency and the increased urbanisation projected for emerging markets could even translate into lower per capita oil consumption with the greater use of mass transportation. Myth 5: The tidal fund flow into oil and other commodity products will keep raising their prices in financial markets. Asset allocation into commodity funds has risen dramatically over the past year, with the total influx in the first quarter of 2008 exceeding the total inflow of 2007. Many commentators argue that this trend has a long way to go as total allocation to commodity-related assets is still below 5% of total financial assets. Late last year, during the heady months of the emerging market boom, similar arguments were bandied about with regard to a potential re-rating of emerging markets stocks. Yet, the reality is that while momentum can drive markets for a while, flows can quickly reverse once it becomes apparent that the underlying fundamentals are deteriorating; indeed this is the case with the Indian and Chinese equity markets this year. Even if pension plans keep increasing their strategic allocation to commodities, the process is likely to be gradual and spread over time. Myth 6: Retail gasoline and diesel prices in emerging markets such as India are too low by global standards. The retail prices of petrol and diesel vary greatly across the world, reflecting the very different tax structures implemented by each country. Venezuela reportedly sells gasoline at a mere 3 cents per litre while Turkey charges $2.80 for a litre. India's latest price for petrol is in line with the global average, although it is lower by 30% for diesel. Still, at $0.85 per litre, India is selling diesel at a more expensive price than China. The key difference between China and India is that the latter cannot afford to keep subsiding oil prices or further cutting taxes on oil products due to the large fiscal deficit. China doesn't face the same compulsion to raise prices as it is running a fiscal surplus amounting to nearly 1% of GDP. If the incumbent government had been more sensible in spending the revenue windfall from the runaway growth of the past four years, then it would be in a much better shape to absorb the global oil price shock. Myth 7: A 1970s-style decade lies ahead for the global economy. Until late 2007, the rise in oil prices did not pose a problem for the global economy. In contrast to the 1970s when the oil price increase largely represented a supply shock, in this decade it is mainly a reflection of booming economic demand in the developing world and till last year any major inflationary impact was offset by high productivity growth in the global economy. Over the past six months, the price of oil has risen at its fastest pace in recent history even as global economic demand has slowed due to fears of supply shortages, which is why it is now leading to fears of a 1970s redux. But the situation today is more analogous to late 1979, the oil price shock has already happened with prices again rising by 900% over the past decade. The global economy is at a point similar to 1979 when demand and the price of oil started to decline. Over the past 30 years, every major oil price setback has been demand-, not supply-led. Now with evidence mounting to suggest that demand is eroding, from the collapse in SUV sales in the US to a change in the subsidy regime in many developing countries, it's only a matter of time before the psychology of ever-rising oil prices breaks on the marketplace.

*The real reason why oil prices are rising

hi, if you find this massage is interesting, share with your friends *The real reason why oil prices are rising - Interesting Read* *The real reason why oil prices are rising* By now it is becoming too obvious that the United States is playing the oil game all over again. And this is the desperate gamble of a country whose economy is neck deep in trouble. Given this scenario, managing prices of oil is central to the US economic architecture. Expectedly, this gamble has been played in a great alliance between the US government, US financial sector and the media. The impending collapse of the US dollar on account of the inherent weakness in the US economy caused by its structural weakness as reflected in the sub-prime crisis; The repeated softening of the interest rates in the US that has the potency to kill the US dollar; and How the fall in the US dollar suits the US corporate sector, especially its omnipotent financial sector. Naturally, since the past few years, the US financial sector has begun to turn its attention from currency and stock markets to commodity markets. According to The Economist, about $260 billion has been invested into the commodity market -- up nearly 20 times from what it was in 2003. Coinciding with a weak dollar and this speculative interest of the US financial sector, prices of commodities have soared globally. And most of these investments are bets placed by hedge and pension funds, always on the lookout for risky but high-yielding investments. What is indeed interesting to note here is that unlike margin requirements for stocks which are as high as 50 per cent in many markets, the margin requirements for commodities is a mere 5-7 per cent. This implies that with an outlay of a mere $260 billion these speculators would be able to take positions of approximately $5 trillion -- yes, $5 trillion! -- in the futures markets. It is estimated that half of these are bets placed on oil. Oil price hike: Govt can't save you: PM Readers may note that oil is internationally traded in New York and London and denominated in US dollar only. Naturally, it has been opined by experts that since the advent of oil futures, oil prices are no longer controlled by OPEC (Organization of Petroleum Exporting Countries). Rather, it is now done by Wall Street. This tectonic shift in the determination of international oil prices from the hands of producers to the hands of speculators is crucial to understanding the oil price rise. Today's oil prices are believed to be determined by the four Anglo- American financial companies-turned-oil traders, viz., Goldman Sachs, Citigroup, J P Morgan Chase, and Morgan Stanley. It is only they who have any idea about who is entering into oil futures or derivative contracts. It is also they who are placing bets on oil prices and in the process ensuring that the prices of oil futures go up by the day. But how does the increase in the price of this oil in the futures market determine the prices of oil in the spot markets? Crucially, does speculation in oil influence and determine the prices of oil in the spot markets? Answering these questions as to whether speculation has supercharged the demand for oil The Economist, in its recent issue, states: 'But that is plain wrong. Such speculators do not own real oil. Every barrel they buy in the futures markets they sell back again before the contract ends. That may raise the price of 'paper barrels,' but not of the black stuff refiners turn into petrol. It is true that high futures prices could lead someone to hoard oil today in the hope of a higher price tomorrow. But inventories are not especially full just now and there are few signs of hoarding.' On both counts -- that speculation in oil is not pushing up oil prices, as well as on the issue of the build-up of inventories -- the venerable Economist is wrong. The finding of US Senate Committee in 2006 In June 2006, when the oil price in the futures markets was about $60 a barrel, a Senate Committee in the US probed the role of market speculation in oil and gas prices. The report points out that large purchase of crude oil futures contracts by speculators has, in effect, created additional demand for oil and in the process driven up the future prices of oil. The report further stated that it was 'difficult to quantify the effect of speculation on prices,' but concluded that 'there is substantial evidence that the large amount of speculation in the current market has significantly increased prices.' The report further estimated that speculative purchases of oil futures had added as much as $20-25 per barrel to the then prevailing price of $60 per barrel. In today's prices of approximately $130 per barrel, this means that approximately $100 per barrel could be attributed to speculation! But the report found a serious loophole in the US regulation of oil derivatives trading, which according to experts could allow even a 'herd of elephants to walk to through it.' The report pointed out that US energy futures were traded on regulated exchanges within the US and subjected to extensive oversight by the Commodities Future Trading Commission (CFTC) -- the US regulator for commodity futures market. In recent years, the report however pointed out to the tremendous growth in the trading of contracts which were traded on unregulated OTC (over-the-counter) electronic markets. Interestingly, the report pointed out that the trading of energy commodities by large firms on OTC electronic exchanges was exempted from CFTC oversight by a provision inserted at the behest of Enron into the Commodity Futures Modernization Act in 2000. The report concludes that consequential impact on account of lack of market oversight has been 'substantial.' NYMEX (New York Mercantile Exchange) traders are required to keep records of all trades and report large trades to the CFTC enabling it to gauge the extent of speculation in the markets and to detect, prevent, and prosecute price manipulation. In contrast, however, traders on unregulated OTC electronic exchanges are not required to keep records or file any information with the CFTC as these trades are exempt from its oversight. Consequently, as there is no monitoring of such trading by the oversight body, the committee believes that it allows speculators to indulge in price manipulation. Finally, the report concludes that to a certain extent, whether or not any level of speculation is 'excessive' lies entirely in the eye of the beholder. In the absence of data, however, it is impossible to begin the analysis or engage in an informed debate over whether our energy markets are functioning properly or are in the midst of a speculative bubble. That was two years back. And much water has flown in the Mississippi since then. Now to answer the second leg of the question: how speculators are able to translate the future prices into spot prices. The answer to this question is fairly simple. After all, oil price is highly inelastic -- i.e. even a substantial increase in price does not alter the consumption pattern. No wonder, a mere 3-4 per cent annual global growth has translated into more than a 40 per cent annual increase in prices for the past three or four years. But there is more to it. One may note that the world supply and demand is evenly matched at about 85 million barrels every day. Only if supplies exceed demand by a substantial margin can any downward pressure on oil prices be created. In contrast, if someone with deep pockets picks up even a small quantity of oil, it dramatically alters the delicate global demand-supply gap, creating enormous upward pressure on prices. What is interesting to note is that the US strategic oil reserves were at approximately 350 million barrels for a decade till 2006. However, for the past year and a half these reserves have doubled to more than 700 million barrels. Naturally, this build-up of strategic oil reserves by the US (of 350 million barrels) is adding enormous pressure on the oil demand and consequently its prices. Do the oil speculators know of this reserves build-up by the US and are indulging in rampant speculation? Are they acting in tandem with the US government? Worse still, are they bordering on recklessness knowing fully well that if the oil prices fall the US government will be forced to a 'Bears Stearns' on them and bail them out? One is not sure. But who foots bill at such high prices? At an average price of even $100 per barrel, the entire cost for the purchase of this additional 350 million barrels by the US works out to a mere $35 billion. Needless to emphasise, this can be funded by the US by allowing it currency printing presses to work overtime. After all, it has a currency that is acceptable globally and people worldwide are willing to exchange it for precious oil. No wonder Goldman Sachs predicts that oil will touch $200 to a barrel shortly, knowing fully well that the US government will back its prediction. And, in the past three years alone the world has paid an estimated additional $3 trillion for its oil purchases. Oil speculators (and not oil producers) are the biggest beneficiaries of this price increase. In the process, the US has been able to keep the value of the US dollar afloat -- perhaps at an extra cost of a mere $35 billion to its exchequer! The global crude oil price rise is complex, sinister and beyond innocent economic theories of demand and supply. It is speculation, geopolitics and much more. Obviously, there is a symbiotic link between the US, the US dollar and the oil prices. And unless this truth is understood and the link broken, oil prices cannot be controlled. Regards Ameet Pandit India *Safe Harbor Statement:* ** *Only for knowledge purpose.* *Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.* ** *Nothing in this article is, or should be construed as, investment advice.** *

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