Quackery! The Modern-Day Phenomenon?

 

Quack2Quackery is a dishonest practice and claims to have specialised knowledge and skill in some field, typically medicine. The World is full quacks for a long time. Along with quackery, we should also combine the word sucker- sucker is a gullible or easily deceived person. Quacks and Suckers are joined at birth. Because there are suckers, we have quacks.

Till about a hundred years back, medicine was not developed by today’s standards. The doctors in those days would merely manage patients rather than curing them. Hence, the doctors were not considered as deities, as some of them appear today. Yes! With modern drugs, diagnostics methods and improved surgical procedures and knowledge, good doctors are like gods, who bring patients back from jaws of death.

Ok, I am not saying that this pathy or that pathy is good! I am talking of many individuals, who though not doctors, claim to cure you of cancer, of diabetes; some promise pregnancy to women who find it a complicated and unachievable process. The latest fad is the dieting industry. Somehow, I am not comfortable with the dieticians who are not doctors by basic training. Similarly, we see trainers in the gym, who have a bit of knowledge about gyming but should not be guiding people with medical issues.

Why do people fall prey to such people and practises? There are several reasons. Some of the quacks are marketing experts with excellent body language and oratory. On top of this, they glibly say things or don’t say things. Consider the case of Mukesh Ambani’s son. He had a significant health issue, and his weight was uncontrollable. Some time back, he moved to the USA for a couple of years, and a whole team of doctors guided the dieticians, trainers and the team to help Junior Ambani to come back to normal. He has come back to normal, but to me, the main reason for success was Ambani’s will and determination. There has been a rumour going on for some time on WhatsApp that he was cured by a celebrity dietician from Mumbai. The dietician has never denied the story! Why would she?

The same dietician offers annual wellness group retreat in Darjeeling. It is a seven-day program of which two are travel days; for balance five days the charges are Rs.2.1/ lacs. You need to reach Bagdogra on your own. As the saying goes, a sucker is born every minute. I am okay even if she charges Rs 5/ lacs for the program but what wellness will you get in five days. It’s a holiday under the garb of a wellness program.

In the dead of winter in Pune when the temperature is around 6 /7 deg C, a Yoga Guru used to have free Yoga camp. People would go there in hordes and attend it for ¾ days. I am okay with this because this Guru never claimed anything, did not charge any money. He was encouraging people to follow Yoga. I checked with a few friends who used to attend the program; they never did Yoga ever through the year! But at least they were not cheated.

Then there is a story of asthma cure in Hyderabad. A family from Hyderabad many years back declared that the GOD had told them that they should offer a particular asthma cure to the general public, free. The family supposedly had a secret potion, a paste, which they would put in the mouth of a tiny fish. The fish was then pushed through the patient’s throat. Again, since it was free and there were no side effects, I don’t care. But I met a friend who was singing paeans of the treatment. He said that he had been going for the procedure every year. I asked him, “If the magic cure is supposed to cure asthma, why do you go every year?” He is still upset with me.

When people have some severe body condition, the quacks try to take disadvantage of the situation. They play with their emotions. They make them follow the incorrect path. The person with difficulties falls prey to glib talks and methods. We read stories of women who go in desperation to some Gurus, as these women cannot get pregnant. The Gurus take advantage and convince the women to sleep with them or sometimes forcefully sleep with them. If the Gurus are lucky, then the women become pregnant. The Gurus become more famous and get more and more women who take “treatment’ from them. Women, obviously, don’t share the rape part with anybody!

Sometimes, some of the quacks advertise miracle treatment on cancer, hypertension, and what have you! Even modern allopathy treatments are not able to cure many of the ailments. But these quacks have a cure for everything. But the suckers go to these quacks, try out stuff for a year or maybe two with no results. In the meanwhile, the body condition has worsened. Some people die! There was a news item of a patient who was taking treatment on piles, from a “doctor”. After a year he got so fed up, the patient went to the “clinic” and stabbed the doctor to death!

Today the medical skills available are unbelievable. After knee replacement, the patient is asked to try walking a few steps within 24 hours. After bypass surgery, the patient is asked to walk on a staircase in a matter of days. When such skills and expertise is available, why people go to quacks? When a doctor suggests to you, about diet, I am okay with it because she will know the effects as well as side effects of the same. But the problem is that some non-doctors make tall claims. These claims are like Ponzi schemes in the finance market. Double your money in next six months. The quacks talk of curing Cancers and Aids; they speak of patients who reduced 50 kgs in two months, and so on. Now there are bariatric surgeries available which help in lowering weights drastically. Why not try these instead of going for a Ponzi scheme? I have no issues about people offering pricey plans at resorts. There are suckers, so why not? But from what I understand, their treatments are not risky, and they do not make tall claims.

I will share an exciting story; not all mass cure schemes are frauds. Near Rishikesh, in Northern India, a “Doctor” was running a mass clinic where thousands of people went every day to be treated for Epilepsy. He would charge them nominally. A team was sent by the Indian Medical Association to check the claims made by the “Doctor”. The Doctor met the team, and he explained his working.

First and foremost, he was a medical doctor who was trained at a renowned Institute in India. He realised that not all epilepsy patients needed modern-day drugs. So he started a drug manufacturing unit. The drugs manufactured were from the era of 1950-60. These drugs had come out of patent issues. He gave these drugs to all the patients. Around 60 % of patients got cured with these drugs. Placebos cure ten to fifteen % of patients, is a proven fact. So at least 70% of his patients got cured. According to me this a good record when we consider hundreds of patients, he was checking every day!

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Friends, by all means, try alternate methods of cure! Homoeopathy, Ayurved do cure various ailments but remember, they are no cure-alls. But Allopathy has the maximum chance of curing complicated diseases. So, don’t play around when you have severe health conditions to handle. For Jaundice, there is only Ayurvedic cure, so similarly, Allopathy is the treatment of severe diseases. Don’t experiment! Go to dieticians for weight control by all means. But if you weigh 124 Kgs, get yourself treated under medical guidance. One can always try alternative medicine along with the primary treatment! But don’t get driven by Chelation treatment for heart conditions, Magnetic Band treatment for joint issues. These are unproven, and the chances are that these clinics are run by people who are not supposed to handle such difficult cases! One more important thing, to avoid minor side effects of Allopathic drugs, don’t go to quacks. You will be worse off!

Money Matters!

Money, Money, Money is lovely song by Abba from 70’s. Money is an important thing in life but it is not everything.

Historically when life started, there was no trade as there was no ownership concept. With individual ownership concept, starting 10000 years back, barter system started. Which later got converted to money and later into currency system. With industrial revolution, wealth generation started galloping and with that the greed! Before this period, only rich people were  the royalty and their kin! This of course continues, I need not say who the modern royalty is. Latest revolution in computers and related businesses have crossed imagination in wealth generation, beyond everybody’s expectations. But the main thing is the “you and me” gang started doing well, moneywise!

How do people make money? Some are brilliant wealth creators, they develop products, processes and concepts which the whole world appreciates and buys. Some inherit money but people like you and me, make money in a very conventional way. Typical people of our generation got themselves good education, took a job, tried to get office accommodation, later bought own home. With other family responsibilities, small amount of money remained in balance which was promptly invested in Bank Deposits. This was the process of living life, straight as an arrow and most important, safety first!

But is the conventional way of living safe life and being satisfied with it, relevant in today’s times. Probably safe deposits route was perfect for socialistic thinking of 70’s and 80’s of last century, we got used to it and continued. One person in Mumbai was given Shares of Wipro in 70’s worth Rs.10000/. The person was moneyed even in those days. He promptly forgot about the shares. When he died around 2010, his family found these shares which were simply stowed away. Their value had become Rs. 280/ million! Wow, Wow and Wow! In today’s financial jargon it is called long term investment! The money was invested in the so-called Market! In modern economies an individual is now being forced to be in the “Market”. For bank fixed deposit now, interest rates are negligible hence the shift. But there is greed. People got lured from FD in banks to very high returns from time immemorial. When banks could not give good returns, how someone else will be able to give high  returns on money. No one raised such issues, at least initially.

In came Charles Ponzi in 1920 in USA. He started one such scheme and lots of  people got sucked and ruined in his schemes. A Ponzi scheme is a fraudulent investment operation where the operator, an individual or organization, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned by the operator on previous investments. As explained, excellent marketing techniques helped first group of people to be lured to such schemes. They were given exorbitant returns from the money invested by next batch of people. This cycle continued for some period and then unexpectedly for the investors, but expected by knowledgeable people, these schemes collapsed. With the schemes collapse, the people collapsed. The way Cadbury chocolate has become generic name for chocolate made by any other company, all such fraudulent schemes came to be known as Ponzi schemes.

Latest to join the bandwagon is the currency in news, I won’t call it popular, Bitcoin. Bitcoin is a cryptocurrency, a digital asset designed to work as a medium of exchange that uses cryptography to control its creation and management, rather than relying on central authorities. The presumed pseudonymous Satoshi Nakamoto integrated many existing ideas from the cypherpunk community when creating bitcoin. Over the course of bitcoin’s history, it has undergone rapid growth to become a significant currency both on and offline – from the mid 2010 onward, some businesses on a global scale began accepting bitcoins in addition to standard currencies.

To give you some feel, in 2010 Bitcoin was trading at 1 bitcoin = US $ 0.003. In November 2017 at its peak it was trading at 1 bitcoin = US $ 17,900/. Today, January 2018 it is trading at 1 bitcoin = US $ 11,171/, this is the  reduction in one month. Ponzi Scheme? I don’t know. Bitcoin is trying to replace global currency in the form electronic currency. But for such type of Electronic currency to succeed, all nations in this world will have to agree. Ten developed nations in the world including US, UK, Denmark, Sweden, Australia have formally accepted Bitcoin as a currency. This may get accepted over a period of time as money. All sovereign countries formally have to be accept Bitcoin. Without this acceptance I visualize a tricky scenario e.g. today you can get one Pizza in US for one bitcoin. How much will you pay for the same Pizza in UK and in Australia? Is this rate going to be based on comparative rates of current currencies? Presently, I find it difficult to understand how this will be achieved. Will I dabble in Bitcoins today? Definitely not. The currency which can get 38% devalued in such a small duration, and has yet to get approval from most of the countries in the world, is a strict no, no for me. I am sure Bitcoin or something similar may become a global currency in future but I feel that is still some time away.

What will today’s generation tell their children about money management? Take your education and learn some special skills of your own! Well, I am sure you know the market conditions, if not study them and create your wealth. Don’t waste your money on homes and cars, when you can always rent whatever you want. But try to stay away from Bitcoins of this world. It is today’s Ponzi scheme!

To you my friends one quick suggestion. Under financial advisor, put some money in market schemes which are Trigger based. Your funds are normally invested in debt funds; but when the equity market is on the Bull run, the money  will get transferred to Equity, make decent money and when Bear run starts money will be shifted back to Debt funds! Any takers from my generation?

Who is the worst? 

Recently we have seen a spate of financial defaults where the so-called giants in industry and business have financially played havoc. Mallya, Sahara Chief Subroto Roy, Unitech Chandras list goes on and on and on! Question came to my mind who is the worst of the lot? I missed on adding the name of our local hero from Pune D S Kulkarni, who has joined the elite list though not on that scale.

In such matters two major aspects need to be checked. Whose action has caused the problems to the health of banking & financial system, and whose action has caused the most damage to the livelihood of individuals besides the banking system? The first group which has caused the issues to banking system are led by Mallya. Before he could be “caught”, he managed to change ownership of companies and to my knowledge companies are running reasonably alright! It appears that both Mallya and the new management have managed to siphon money to tax free heavens. Mallya apparently has billions of dollars in his personal name and has managed to evade tax in many locations in the world. How to get money back from such people? Assets he created all over India have become tricky to dispose-off, now that these have become tainted assets. Same issue is there in case of Amby valley, near Pune, huge asset created by Roy!

How to decide who is the worst of the lot? My thought process tells me that those who have cheated individuals, many of them retired, who invested most of their life savings, are the worst culprits. By this test Mallya may appear to be a saint. No individual has launched any complaint against Mallya. By this logic other three appear to be major culprits. Roy and Chandra are in jail for some time, thanks to Supreme Court; has their families’ life style changed, no way! They have no money to return but have enough money to blow! Our friend D S Kulkarni’s family lives in rented flat! So sad! Not really, the flat is in Trump Tower in Pune with a rent Rs. 400,000/ per month! Extremely high by Indian standards. Mallya’s case is totally different. He moved to UK when there was no criminal case against him. So, when he entered UK, he was not “tainted”! The propah British law says that when Mallya entered Britain, he was not “tainted”. So procedures had to be followed, as he was not a fugitive when he entered Britain! British took their own sweet time to start the extradition processes. The Indian authorities are now tensed up and keeping their fingers crossed. In another similar case in Britain, the judge who will be handling Mallya’s case gave a decision that the concerned culprit will not be extradited, as jails in India are in extremely poor condition. Same logic may be applied in Mallya’s case!

I don’t have knowledge of various laws but my common sense tells me that such people’s factories shut down, businesses close down; the so-called owners are still having fun whether there is profit or loss.  The workers, financial institutes, and vendors are facing the main brunt. I remember when in Pune, Garware Nylons shut down, the loss was to the workers, vendors and banks! Garware’s have been moving around in their helicopters!

Why does this happen? How is this allowed to happen? Where is the lacuna? When any organization starts, it needs money; it gets money in the form of equity, loans and fixed deposits and working capital. The persons who start the company are also expected to put in the seed capital. Everything works quite all right in the initial phase. How business runs, depends on many factors some under control and some not under control. When people invest money in business as equity, it is a risk taken knowingly. When business does well people get dividend; and at some stage some investors liquidate their shares, based on share market variation and make their kill. But when the business does not perform well they are in for a loss. This is a known risk for investors. Same things happen in case of fixed deposits by people. Interests are paid on time, whenever requested deposits are refunded. Problems begin when businesses start floundering. Promoters, at this stage probably start treating FD’s as equity! If business conditions deteriorate further then the deposits become Ponzi schemes! Take deposits from someone promising high rate of interest and try to pay interest to older depositors. Vicious circle goes on and on and on till the court and Police cases start. Unfortunately for individuals, the first right on recovery from such organizations is with financial institutions!

In the meanwhile, the smart promoters have done something in between. They take deposit under the name of one company and transfer the money to their other businesses. This is done like hedging when intentions are not good . So, their other businesses run well. The assets and incomes made in these businesses are not in the name of original promoters of the main company. You don’t need to own a helicopter or a Mercedes to use it! 😃Holidays in cool climes continue because it is never done under parent company. Wealth is flaunted and social activities continue. I am by no means a socialist or a communist but what I have just explained is simply cheating. Small vendors, retired teachers, others are affected badly. This is what is happening in case of D S Kulkarni. He even has gumption to claim that his business started suffering when Lehman Brothers collapsed in 2008!

How do these people maintain their lifestyle even after they are in jail or court cases are on? Here is an example from building trade. It is pretty simple. Company A buys a plot of land. B, C, D and E are other companies from the group. The plot is finally purchased by E following the straight path via B/C/D. By the time plot is in possession of E its price maybe five times! This is loaded on the project to sell homes to us. A is the company who takes FD’s from people but income of A is meagre and this money is routed to “other” companies. A & E ownerships may have some connect but B, C, D are owned by other family members or are trusts. These companies will have high profits! Another way of making the killing is that when E sells a home either B/C/D gets say 3 % commission on each sell as they are “Sells Agents” for E! Got it.

What is the solution? Believe in market rumours! Smoke is seen only when there is fire! It is impossible to know which organization can go into difficult times. The moment you hear some story, withdraw money from such organizations. Don’t keep on hoping that they will come up again! If they do come up put your hard money with them again! After all it’s your money! My take is that those who put individuals in difficulty are worst of the lot!