"D

o Hindi films have a song for almost every occasion?" I wondered, as the radio played the old

number Aao twist karen from the movie Bhoot Bangla sung by Manna Dey. "Doesn't this song make you feel like dancing," said the roommate. "Yes, it does," I replied. "And it even goes with the occasion." "What occasion?" she asked. "Twist is now back in fashion!" "The dance?" she asked. "The funny moves that Bollywood film starts of the sixties and the early seventies used to make when it came to dancing?" "No. Looks like you haven't been following the news. The United States Federal Reserve, the US central bank, has announced a new $400-billion rescue plan, which is being called the 'twist'." "The twist, after the dance, you mean?" "Yeah, after the dance." "What's the logic?" she asked. "Well, the idea is to twist the yield curve." "And what is a yield curve?"

"Governments sell financial securities of various maturities like 1 year, 5 years, 10 years, 30 years, etc, to
finance their fiscal deficit. Fiscal deficit is the difference between what the governments earns and spends. These financial securities are referred to as bonds and the returns that these bonds offer are referred to as yield," I explained. "So far so good," she butted in like she usually does. "When the yields across various tenures like 1 year, 5 years, 10 years and 30 years are mapped in the form of a graph, what we get is a yield curve." "Interesting. So how do we twist the yield curve?" "The US Fed plans to sell bonds maturing in three years or less, and use the money they get by doing that to buy existing bonds in the market which have a remaining maturity period between six to 30 years." "And what will that do?"

"When the US Federal Reserve decided to buy bonds maturing in six to 30 years, the demand for these
bonds will go up."

"Yes . . ." "More demand would mean that the price of these bonds will go up." "Okay." "So earlier you could have bought a bond that paid an interest of, let's say, 2.5 per cent for $100. After the US Fed intervenes and buys bonds, the price of this bond goes up to $101. So now this bond is paying an interest of $2.5 every year, but its price is $101. So the return on this bond has fallen. Is that clear?" I asked. "Yes, it is." "So the return on the bond has fallen, which means that the yield curve has changed from as it was plotted earlier, i.e. it has been twisted." "But I still can't understand, why the name 'twist'?"

"Well, the first time the US tried such a thing was way back in 1961, when John F Kennedy was the
American President. Back then twist was a new dance craze sparked off by singer Chubby Checker. And so the name!" "That's some link! But why are they doing this?" "Well, the rate of return or the yield on the government bond sets the tone for interest rates that banks and other financial institutions charge on loans to individuals as well as businesses. So if this operation brings down the yields on government bonds, as it is theoretically expected to, the interest rates will also fall." "And how will that help?" "In various ways. Lower interest rates will encourage people to borrow more and spend that money. When the money is spent it will benefit businesses, which in turn will mean more taxes for the government. For an economy which has an official unemployment rate of nearly 9 per cent, it will also mean creation of more jobs as businesses do well." "Isn't everything so nice and easy in theory!"

"Yes, it is. In fact, in theory it would also mean lower EMIs (equated monthly instalments) for people who
have lots of loans to pay off. Lower EMIs would mean higher savings and thus more money to spend, which would lead to a higher growth rate for the economy." "But all that is in theory!" she remarked again. "Yeah, you are right. Eric Swanson, an economist, studied the first twist move of 1961. And he came to the conclusion that it hardly had any impact on bond yields. The yields went down by a miniscule 0.15%. So if yields don't go down, interest rates don't go down, and the entire economic theory we just discussed goes for a toss."

"So economic theory goes for a toss again." "The other thing is that the interest rates across the maturity spectrum are already at extremely low levels. The interest rate being offered on a 10-year government bond in the US has fallen to 1.9% already, from 3.2% in July. Also US companies are flush with cash right now, and given the sad demand scenario there is really no incentive for them to borrow money and go about expanding their business." "Sure it doesn't make sense."

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"And more than anything, the US consumer is now busy paying off all the loans that he has accumulated
over the years. So he really isn't in the mood to borrow more. The household debt in the US fell by 0.6% in the second quarter of the year showing that the US consumer is actually paying off the accumulated debt. Also the savings rate in the US reached around 5% in July 2011. Just before the financial crisis started the savings rate was even in negative territory for a while, i.e. people were spending more than what they were earning." "So all that is changing now?" she asked. "It looks like that. Also the biggest thing is that with an employment rate of 9%, everybody knows somebody who has lost his job. Given that the levels of insecurity are very high and in this environment people are more likely to save money for a rainy day, than go out there and spend it or for that matter borrow it and spend it." "Hmmm. So the 'twist' isn't working!"

"Yes. In fact, there is another school of thought at work. The government wants the interest rates to fall to
such low levels that people do not invest money with banks and invest that money in the stock market, ensuring that the stock market indices go up, meaning higher returns. With higher returns people feel wealthy and hence go out and spend money, which in turn benefits the economy." "But that's again just a theory?" "Yes, it is. The stock markets all over the world clearly aren't buying this theory and have fallen since the twist announcement was made on Wednesday." "So what does that leave us with?" she asked. "The song!" I replied. "And the dance. Aao twist karen . . . !"

Sachin scared of me, says Shoaib Akhtar in his autobiography

NEW DELHI: Controversial former Pakistani player Shoaib Akhtar made some sensational claims in his autobiography 'Controversially Yours', revealing Sachin Tendulkar being scared of him. In another revelation the pacer has accusedShahrukh Khan and Lalit Modi of cheating him during IPL. Speaking exclusively to TOI, the fastest bowler in the history of cricket, marked by a short, tempestuous career, explains his story, full of trauma, success - and controversy. He retired from cricket following the 2011 World Cup. Why this book now? "I am in peace post-retirement, giving all the attention I ever wanted to my old parents, but this book has not been a sudden thing. A whole year and a half went into it. What I've written is my experience, put as honestly for others to know. This is the truth - for the world, it may be a big controversy. It saddens me to hear all kind of stories about Pakistani cricket in the world. People should know what we go through and why we are the way we are." 'Controversially Yours' shies away from little in Akhtar's life. It maps his journey from an economically deprived, yet happy childhood, into an adolescence driven by his quest to break into Pakistani cricket. Born flat-footed, suffering whooping cough, Akhtar describes the blood, sweat and tears that took him to breaking the 100 mph barrier, playing as Pakistan's 'Rawalpindi Express'. Comfort stayed elusive. Akhtar describes the severe class discrimination marring Pakistani cricket, the arrogance of the Pakistan Cricket Board ( PCB), his humiliation and his failures - including balltampering and even attacking teammates with a bat. Alongside, he takes on Pakistani and international players, coaches, selectors, the media, Lalit Modi, Javed Miandad, Wasim Aqram - even Pervez Musharraf. "You've criticized several important figures. Didn't you feel apprehensive? "No apprehensions. This is the truth. Why must anyone fear speaking it?" "What kind of response are you expecting?" "I hope Pakistan cricket will be understood and respected. I hope people will feel the other side of me and understand why I am the way I am." Akhtar is the way he is because of the extremes he's seen - from the exhilaration of making world records to the darkness of chucking allegations, drug tests and match-fixing. His story is tense, taut and triumphant. And there's a reason he's telling it now. "How did you come up with the book idea?" "For me, it's Sudesh who worked right from conceiving the idea to realising it." Sudesh Rajput, Akhtar's close Indian friend, may have influenced his outlook considerably.

Advani gives it back to Modi

AHMEDABAD: Turbulence is only mounting in the Bharatiya Janata Party (BJP) after their octogenarian leader and prime ministerial aspirant Lal Krishna Advani was candidly told by Rashtriya Swayamsewak Sangh ( RSS) to opt out of power politics and work for the party as only a mentor. It appears that Sangh supremo Mohan Bhagwat also suggested to Advani, when the two met in Nagpur on Wednesday for clearance from the Sangh Parivar for the rathyatra against corruption, that leaders like Advani and Murli Manohar Joshi should not contest elections any more and thus pave the way for Generation Next. Hurt by this snub which, he felt, was orchestrated by Gujarat CM Narendra Modi, Advani has decided to dissociate himself from day-to-day party rituals. But now that he does not need Modi's help to win from Gandhinagar, he is sending signals back to his constituency. To begin with, he will break the tradition of 20 years on September 25 of visiting Somnath from where, on this day, he started his first rathyatra to Ayodhya and went on to become deputy PM. This has caught Modi by surprise because on this very day, he had planned a huge rally outside Ahmedabad. It was planned in such a way that Advani would first visit Somnath and then fly down to Ahmedabad to address the rally, where Modi would have launched his war for the governor's recall over Lokayukta row. Now that Advani is not coming, Modi isn't inviting anyone else. Not only has Advani decided not to be in Gujarat on September 25, for the first time since 1990, his office has also sent a request to Bihar chief minister Nitish Kumar to flag off his rathyatra from Sitabdiara in Saran, Bihar, the birthplace of Jay Prakash Narayan. All BJP chief ministers, including Modi, have been invited to this location which was suggested by Modi, even as Advani's choices were Porbandar and Karamsad. Nitish's office, however, has not responded to BJP's request yet. The event is scheduled for October 11, JP's birthday. BJP insiders say Advani was also hurt by Modi's delay in giving nod for the rathyatra's launch in Gujarat and, instead, embarking on a three-day fast to brazenly proclaim his leadership. Describing his absence at Somnath as "very symbolic", an Advani aide said, "I don't think the old man will give up so easily. In 2014, when the next elections will be held, he will be 86. He is very fit and there is likelihood of possible allies like Naveen Patnaik, Chandrababu Naidu, Ajit Singh, Om Prakash Chautala, Jaganmohan Reddy and others accepting him as a leader than anyone else."

SC says no to stay on release of 'Mausam'

NEW DELHI: The Supreme Court on Thursday refused to stay the Friday release of Shahid Kapoor starrer " Mausam" and dismissed a media production house's copyright claim over the title of the movie. The production house -- High Definition Television Private Limited (HDTPL) -- had sought stay on the release of the film claiming that 10 years ago it had acquired rights over the title of the film. Seeking an urgent hearing on its petition before a bench of Justices Dalveer Bhandari and Deepak Verma, HDTPL claimed that it had a registered the title with the Association of Motion Pictures and Television Programme Producers (AMPTPP). Quoting proviso to Rule 10 of AMPTPP, the petitioner said if any title remained unused by a producer for a period of three years and if there was an application for the same title from another producer, the Committee was entitled to ask for an explanation from the title holder. Since the new film has been produced by Eros Media Limited and Cinergy Pictures Private Limited, HDTPL claimed violation of the rule and first approached the Bombay High Court. On September 13, the HC refused to entertain this plea.

Roll over Einstein: Pillar of physics challenged

GENEVA: A startling find at one of the world's foremost laboratories that a subatomic particle seemed to move faster than the speed of light has scientists around the world rethinking Albert Einstein and one of the foundations of physics. Now they are planning to put the finding -- and by extension Einstein --to further high-speed tests to see if a revolutionary shift in explaining the workings of the universe is needed -- or if the European scientists made a mistake. Researchers at CERN, the European Organization for Nuclear Research, who announced the discovery Thursday are still somewhat surprised themselves and planned to detail their findings on Friday. If these results are confirmed, they won't change at all the way we live or the way the universe behaves. After all, these particles have presumably been speed demons for billions of years. But the finding will fundamentally change our understanding of how the world works, physicists said. Only two labs elsewhere in the world can try to replicate the results. One is Fermilab outsideChicago and the other is a Japanese lab put on hold by the tsunami and earthquake. Fermilab officials met Thursday about verifying the European study and said their particle beam is already up and running. The only trouble is that the measuring systems aren't nearly as precise as the Europeans' and won't be upgraded for a while, said Fermilab scientist Rob Plunkett. ``This thing is so important many of the normal scientific rivalries fall by the wayside,'' said Plunkett, a spokesman for the Fermilab team's experiments. ``Everybody is going to be looking at every piece of information.'' Plunkett said he is keeping an open mind on whether Einstein's theories need an update, but he added: ``It's dangerous to lay odds against Einstein. Einstein has been tested repeatedly over and over again.'' Going faster than light is something that is just not supposed to happen according to Einstein's 1905 special theory of relativity _ the one made famous by the equation E equals mc2. Light's 186,282 miles per second (299,792 kilometers per second) has long been considered the cosmic speed limit. And breaking it is a big deal, not something you shrug off like a traffic ticket. ``We'd be thrilled if it's right because we love something that shakes the foundation of what we believe,'' said famed Columbia University physicist Brian Greene. ``That's what we live for.'' The claim is being greeted with skepticism inside and outside the European lab. ``The feeling that most people have is this can't be right, this can't be real,'' said James Gillies, a spokesman for CERN, which provided the particle accelerator to send neutrinos on their breakneck 454-mile trip underground from Geneva to Italy. France's National Institute for Nuclear and Particle Physics Research collaborated with Italy's Ran Sass National Laboratory for the experiment, which has no connection to the Large Harden Collider located at CERN. Gillies told The Associated Press that the readings have so astounded researchers that ``they are inviting the broader physics community to look at what they've done and really scrutinize it in great detail.'' That will be necessary, because Einstein's special relativity theory underlies ``pretty much everything in modern physics,'' said John Ellis, a theoretical physicist at CERN who was not involved in the experiment. ``It has worked perfectly up until now.'' And part of that theory is that nothing is faster than the speed of light. CERN reported that a neutrino beam fired from a particle accelerator near Geneva to a lab 454 miles (730 kilometers) away in Italy traveled 60 nanoseconds faster than the speed of light. Scientists calculated the margin of error at just 10 nanoseconds, making the difference statistically significant.

Given the enormous implications of the find, they spent months checking and rechecking their results to make sure there were no flaws in the experiment. A team at Fermilab had similar faster-than-light results in 2007. But that experiment had such a large margin of error that it undercut its scientific significance. If anything is going to throw a cosmic twist into Einstein's theories, it's not surprising that it's the strange particles known as neutrinos. These are odd slivers of an atom that have confounded physicists for about 80 years. The neutrino has almost no mass, it comes in three different ``flavors,'' may have its own antiparticle and even has been seen shifting from one flavor to another while shooting out from the sun, said physicist Phillip Schewe, communications director at the Joint Quantum Institute in Maryland. Fermilab team spokeswoman Jenny Thomas, a physics professor at the University College of London, said there must be a ``more mundane explanation'' for the European findings. She said Fermilab's experience showed how hard it is to measure accurately the distance, time and angles required for such a claim. Nevertheless, the Fermilab team, which shoots neutrinos from Chicago to Minnesota, will go back to work immediately to try to verify or knock down the new findings, Thomas said. Drew Baden, chairman of the physics department at the University of Maryland, said it is far more likely that there are measurement errors or some kind of fluke. Tracking neutrinos is very difficult, he said. ``This is ridiculous what they're putting out,'' Baden said, calling it the equivalent of claiming that a flying carpet is invented only to find out later that there was an error in the experiment somewhere. ``Until this is verified by another group, it's flying carpets. It's cool, but...'' So if the neutrinos are pulling this fast one on Einstein, how can it happen? Stephen Parke, who is head theoretician at the Fermilab said there could be a cosmic shortcut through another dimension -- physics theory is full of unseen dimensions -- that allows the neutrinos to beat the speed of light. Indiana University theoretical physicist Alan Kostelecky, theorizes that there are situations when the background is different in the universe, not perfectly symmetrical as Einstein says. Those changes in background may change both the speed of light and the speed of neutrinos. But that doesn't mean Einstein's theory is ready for the trash heap, he said. ``I don't think you're going to ever kill Einstein's theory. You can't. It works,'' Kostelecky said. Just there are times when an additional explanation is needed, he said. If the European findings are correct, ``this would change the idea of how the universe is put together,'' Columbia's Greene said. But he added: ``I would bet just about everything I hold dear that this won't hold up to scrutiny.''