California's dysfunctional budget

If California was an independent country, it would be the seventh largest economy in the world. With a Gross State product of $1.5 trillion, its a larger economy than India. Its head of state would certainly attend the G7 and G20 summits. For an economy of its size, the state budget is so dysfunctional, that it beggars belief. I would even trade India's budget, which I had commented upon here and here, for something as dysfunctional as California.

Firstly the numbers. Like all governments, California also follows a single entry system of accounting - there is no balance sheet and revenue and capital is mixed up. This year, they just passed the budget two days ago after the annual spectacle of brinkmanship. As presented originally, it has a $42 bn hole - expenditure higher than revenue by $42 bn. The approx numbers were $101bn in revenue and $ 143 billion in expenditure. Pause for a moment and consider this shortfall. The shortfall is higher than the entire expenditure of every other state in the US bar New York. The shortfall is higher than the GDP of 100 countries in the world. To the credit of the lawmakers, they at least tried to part plug this hole. They raised taxes by $ 15bn and cut expenses by $ 13 bn. There is still a huge gap.

Why did this come to this ?

On the revenue side, California depends largely on personal income tax and corporation tax for its revenues. As the financial crisis bit in 2008, revenues have plummeted.

On the expenditure side, California is an example of democracy sometimes gone wild. Citizen initiatives that are directly voted on by the electorate can decide what is to be spent, without any reference to the budget situation. Consider the following

• Proposition 98 in 1988, perhaps the most famous of the initiatives, has locked $30 bn for education. Nobody can touch that even if theoretically revenues fall below 30bn.
• Proposition 10 in 1988 has locked $ 522 m for childhood development
• Proposition 71 earmarks $ 3 bn over 10 years for stem cell research
• Proposition 12 of 2008 mandates a cost of $ 1.8 bn over 30 years to fund veterans to purchase farms and houses
• Proposition 1A of 2008 mandates $10bn in bonds to cover a high speed rail link mainly from San Francisco to Los Angeles (what has the world come to - a Los Angelite to travel by train instead of a car ?)

Each is a separate proposition where a voter says yes or no. What do you expect - you can't seriously vote no for veteran's welfare. Who's going to foot the bill is not the voter's problem.

One of the most famous Propositions is Proposition 13 in 1978 whereby property taxes are mandated to be no more than 1% of assessable value which cannot be increased by more than the rate of inflation (doesn't matter whether there is a property boom or not).

Californians should not allow this to go on. No "single entry" Proposition should be passed - if there is a proposition to spend more, included in it must be where the money will come from (not from borrowings). If there is a tax limiting proposition, included in it must be what expenditure will be cut.

And on the governance side, California requires that the budget is passed by a two thirds majority of the Legislature. Neither the Republicans nor the Democrats will have a two thirds majority. California now has a Republican governor and a Democrat majority in the legislature. Just in case nobody has noticed, bi partisanship has gone out of fashion . Hence the annual spectacle of brinkmanship - no compromise, governor threatens to sack all employees, some last minute compromise after sleepless nights is reached and the cycle starts all over again.

But its not for nothing, that California has some of the most dynamic people in he world. In 2008, they did pass Proposition 58, requiring a balanced budget - its why in the latest round taxes did go up and expenditure did get cut down. If not for this, I don't think there would have been any cuts at all.

In the Nov 2008 round of propositions, about $ 227m was spent on campaigns for the 12 Propositions that were on the ballot. I suggest to the Californians that they consider scrapping the citizen initiatives and put this money into the budget pot. That might help !

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E Mail Addiction

Try this today. Count how many times you look at your e mail , either on your PC or on your Blackberry. If you've looked into your mailbox more than at 15 different times, you're addicted !!

E Mail addiction is an under recognised problem. Yes E Mail has been an integral part of life for some time. But it has crept in slowly and virtually taken over the life of the addicts. There was indeed a time before E Mail. In a company that I worked for, the week closed on a Thursday. Nobody could really tell me why such an odd day was chosen. When I read the history of the company, I gathered that in the good old days, weekly reports had to be sent by ship to the headquarters in London. The weekly steamer sailed on a Tuesday or a Wednesday, I forget what. So in order to catch the ship, the week had to be closed on a Thursday for the sales to be collated and mailed from the field on a Friday and then the weekly report be ready in time before the ship sailed. Yes, there was a time before E Mails.

Back to E Mail addiction. You see symptoms of it everywhere.

Walk into any office and look around. You'll probably see rows of people peering into their computers. Granted that some of them may be playing games or browsing the Net. But a majority of them would be busily occupied with Microsoft Outlook. Clear evidence that the most often done activity in any company is reading and answering E Mail. Is that what a company is for ?

Take any meeting. More than 50% of the attendees are typing away on the laptop or on their Blackberry. Its impossible to hold a sensible meeting these days; people are busy E Mailing. Its amazing how people who are incredibly polite and sensitive in real life, turn into rude E Mail monsters in a meeting ; why come to the meeting and be rude to the meeting host, if all you are going to do is to watch your Inbox. Their excuse is that they are "multitasking", which I completely debunk, as its just jargon to say they are addicted to E Mail. For some tips on how to run "Topless Meetings" click here.

Worse are presentations to be made to the Board or Executive Committee or some senior executive. They are all E Mailing away and scarcely listening to you. Why travel 15 hours (in first class) to visit a country and review the business, if most of the time you are E Mailing ? The worst situation I have had was when I had to present to this guy who didn't listen to one word of what I was saying and was openly punching away at his Blackberry. I had half a mind to slip in a sentence in my presentation that he was a dumb idiot and I would have gotten away with it because he wasn't listening !

What is it about E mails that make them so addictive. Almost none of us can resist the sight of an unopened E Mail. Why ? There's almost nothing in business that's so incredibly urgent that it has to be seen in the next 20 seconds. If there was something really that urgent, we'll get a call. And yet we are hopelessly addicted. I think its got to do with a primordial instinct of wanting to know everything. And yet this seems to have been accentuated when mail became electronic. I have worked in the medieval ages before E Mail. The pile of unopened correspondence in the In Tray was a common business occurrence. Very few people were addicted to the In Tray !

The addiction is at the very least a threat to your effectiveness as a manager. At worst it can take over your life. I know of a manager who set alarms to wake up three times in the night to check on his Blackberry !

A detox programme for E Mail addiction would take the form of firstly disconnecting your Blackberry (horror of horrors). And then setting up a discipline that you'll open your inbox on the PC only once in an hour and deal with the mails that are pending in one go, after which you'll shut your mailbox and do something else. Use the time to uninterruptedly do your work for which you are paid for - set strategy, implement strategy, talk to people, read, analyse, whatever. In an 18 hour day when you are usually awake, don't open the mailbox more than 15 times. Join Emailaholics Anonymous.

A google search on E Mail addiction yields 18.2 million responses. There's lots of stuff out there on the dangers and how to kick the habit.

In the prehistoric days , when there was a whole generation of managers ,uncomfortable with E Mail, there was a venerable gentleman I knew, who was terrified of getting on to the computer. His routine was that his secretary would print all his emails, which he would take home in the evening. He would then scribble a response on them which his secretary would then type out and send as e mails the next morning. As young computer savvy kids, we used to mock at and deride this old fossil. Now I am not so sure if he was not the wiser man !

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Bank Nationalisation

The US is struggling to come to grips with the unpleasant choice of having to nationalise some of its banks. Citicorp looks set to become the first major bank in the US to become part nationalised, with the government likely to take up a 40% stake. Frannie Mae and Freddie Mac, while not being banks, are in effect nationalised, as is AIG. In the UK, Northern Rock was the first to be taken over and HBOS and RBS are already majority owned, with every likelihood of becoming fully government owned.

Nationalisation is a dirty word in the more capitalist of economies. Through bitter experience, these countries have realised that government ownership of business does not work. Especially in the US, it would be political suicide to nationalise. And yet what can governments do in the crisis situation that we face today. It has doled out a large sum of money to Bank of America and Citibank just recently and now the market value of both these banks is lower than the amount the government gave each of them. How long can it keep shovelling money in ? Even Alan Greenspan , the doyen of laissez faire capitalism, now favours "temporary nationalisation" .

The prevailing view amongst most free market experts is that governments will have to nationalise the banks, restructure them by creating a "bad bank" to isolate the worthless assets, get credit moving again and then quickly get out once greater normalcy comes to markets. Nobody wants government involvement once the good times come again.

I am a die hard free markets man. To me, nationalisation, is a painful word. And yet, I think that the above prescription from the free market votaries is a bit rich, especially the "get out when the good times come" part.

Governments are, and will be, involved in the financial services industry for two reasons. One is that unlike any other industry, this industry carries a systemic risk which can bring down the whole economy, like what we are witnessing today. The second is that implicitly, there is a sovereign guarantee on bank deposits - no government can watch a run on a major bank and do nothing. If the government is therefore a guarantor of last resort, it is completely hypocritical for the industry to then argue that governments leave them alone, except when there is a crisis.

My humble two penny contribution to the debate. Governments have no option but to take part, or complete, ownership of the troubled banks. It is distasteful, but there does not appear to be any other alternative. Even the US Republicans are slowly coming around to this view. Post restructuring, at the right time in the future, governments divest their shareholding, making a profit for the tax payer. Its absolutely imperative that the existing shareholders of the banks lose their shirts, not the government. But even after divestment, governments retain a golden share, which will rest with an independent regulator, and not with the politicians. This golden share will ensure that extremely stringent regulations are brought to ensure that the probability of recent events recurring again are very remote.

Regulations have to make financials services a boring business. Capital adequacy ratios have to be massively increased and set in stone - unchangeable whatever be the circumstances. The nature of activities each type of financial institution can undertake, has to be severely limited. Anti trust measures should ensure that no institution becomes so big that "it cannot be allowed to fail". Very severe restrictions need to be placed on the types of instruments that can be created and traded - no more instruments of mass destruction. Perhaps an additional profit tax to create a fund for the day when another disaster will surely come - the history of the world is littered with painful bubbles. Innovation will, alas, be severely curtailed. Profitability of these institutions will become limited. Liquidity might become restricted as speculation, which provides the liquidity, will diminish if the opportunities for making extraordinary money are not there. Maybe every economic opportunity may not get the funding it deserves. But so be it.

Government should not run businesses, for sure. But they must be the schoolmaster, with cane in hand and corporal punishment freely allowed.

Financial services should become an utility industry. Dull and boring maybe. The best brains may not want to work there. Perhaps that might be to the good. We'll know we are safe when the banker is mentioned in the same breath as a train spotter.

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It ain't the same anymore

Accountants are, by nature, cautious and tradition bound. You wouldn't expect to see accounting in the forefront of change. And yet sweeping changes in accounting have happened in the 20 odd years that I have been acquainted with this profession. Here is a trip down memory lane.

When I first started working as an accountant in the early eighties, computers had still not come into common use. The more common contraption was something called a comptometer (with various clinks and bells), which anybody below the age of 40 would not have heard of. Calculators were there, but you needed a capital budget to buy one with detailed justification of cost benefit. Ledgers were manual , in loose leaf binders. Sounds prehistoric ? Read on.

Everything was manual. There was a role of a ledger keeper, whose only job was to post entries into the ledger, using double sided carbon - the proof sheet being a method to ensure that at the end of each day, at least the total of debits and total of credits matched. The ledger keeper could not go home until the proof sheet tallied.

There was no such thing as monthly or quarterly closing. Closing was only an annual activity. It was a major event - it took some 15 days to close the books of a factory or a branch and another 15 days to consolidate the accounts of all the units inside a country - god knows how long it took to add up globally. All other activity came to a halt in January - no payments, no routine transactions. The ledger keeper was a key man - he would post furiously during this period. The comptist was another key person. This was the expert on the comptometer who added up the ledger sheets. Both of them knew that this was their moment - so demands for higher wages, and threats to go on strike were usual (you could almost predict when exactly their tummies would begin to ache and when they would decide to go home in the middle of the day). Cosying up to these guys was an important part of the accountant's job. And the first time the trial balance was struck, it would not tally ! So every hand was called, to total and retotal the sheets until the trial balance tallied. I still remember the year when it stubbornly refused to tally for 3 full days and nights of non stop totalling and when it finally did, we all let out a war cry, which they say frightened all the cats and dogs in the town to run and take cover.

Closing was virtually over when the trial balance tallied - whether the numbers were all fully right and made sense was secondary ! As soon as the trial balance tallied, an army of typists would type out the trial balance in the forms that were mandated and a nice packet weighing in at 5 kg would be created. There was of course no email or internet, so somebody would be found to catch a plane, carry the accounting returns to headquarters, while everybody else left for home to sleep flat out for 24 hours.

And then would come the auditors, including one worthy who was their comptist (with his own "independent"comptometer), who would retotal all the ledger cards. Green pens would come out in their dozens for the auditors to tick - stories abound of how you could get the auditors to put their green ticks on any two sheets of paper as long as they carried the same numbers.

When you decided to qualify to becoming an accountant, you had to serve as an articled clerk (read bonded labour) in a Chartered Accounting firm. And a geriatric "senior" would start training you by making you add up each page in the telephone directory mentally for three months, to sharpen your adding skills.

All payments, were of course, made by cheques. Cheques would be typewritten by a dedicated typist using the old typewriter that made a racket.

Management accounting was the art of mastering the green sheet - for some reason, ruled sheets with columns came in green color in India in those days. The tool of choice was the pencil - sharpening 25 pencils was the first thing you did in the morning. The expert, who consolidated management reports was a sight to see - he would join together 2 or 3 desks and stick together some 10 of the dreaded green sheets to create a super sized sheet with 342 rows and 74 columns. Various underlings would then write numbers into the correct cell as he called them out. He would then run from one end of the sheet to the other, adding numbers along the way with lightning speed. His total was then the company's sales or profits or whatever else they were reporting !

It was a different world in those days. In a short span of 20 years, the accountant has changed beyond recognition. If somebody who was an accountant in the late seventies, was suddenly plucked into today's world, he would probably die of shock.

How did the boring conservative accountant change this way,. Especially as other functions have remained more or less the same (let me bait you guys) ? The sales guys still explains why he cannot sell because he does not have the right stocks. The marketing guy still can't quote a credible market share number and still makes lousy ads. The production guy still makes the product that is not needed and won't make the product that is. And the HR lady still can't get the increment letters or the payroll out in time.

Raise a glass to the super sexy accountant !!

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Is all this business travel really necessary ?

(photo courtesy Businessweek)

Every business executive these days travels like crazy. In the "flat" world of today, its usually long distances across countries. Is all this really necessary ?

I have myself been guilty of wild travel - one of the reasons I took my sabbatical. My badge of shame includes a gold card from Star Alliance, gold card from Oneworld alliance a Platinum card from Jet Airways, and assorted colour cards for various other independent airlines , all of which I am now delighted to throw into the waste bin. I am much experienced in this area !

Most of the travel is a waste. Any manager, who is honest with himself, will admit it.

The worst reason to travel is a conference. The ones where you have a large group of people listening to somebody lecturing. Two days of absolute torture - the fact that nobody attends every session of the conference and listens intently and fully, is enough to justify that the value of this is questionable. People fight with each other to get invited to conferences and be "seen" and pout if they aren't, for sometimes this is a badge of importance - why not just publish this list of importance and forget the conference ! The only justification for a conference is the socialising or networking that happens during the sidelines. There are now equally effective means of networking, that does not require physical presence - something that I justify lower down.

The largest reason for travel is an internal company meeting. This, in my book, ranks only a shade below a conference in the list of worst reasons to travel. The meeting is usually between people whom you know reasonably well and are your colleagues. Why do you need to see them and smell their breath to "meet". Witness, in any meeting, the number of people who are ducking out to take calls, the number of people who are fingering their Blackberries, the number of people who are punching away at their laptops ..... I rest my case. Again "networking" and "personal touch" is often touted as a reason for physical meetings, usually to justify the booze and the dinner in the evening. There are now equally effective ways to meet, without resorting to physical travel.

Another important reason to travel is meeting the customer. Here there is no alternative - this is one of the most important activities in any business. Physical presence is necessary. But I am often amazed at how many people tag along to "meet the customer". There is rarely one on one meetings - a retinue goes. Usually only one or two people are necessary. Instead a battalion travels. When the customer is met, two people talk 95% of the time and the others smile and take notes. My favourite anecdote is when 74 people (me included) went to meet the customer.

A fourth reason , especially among senior executives and directors, is to visit the market/country/company. And what do they do - they go and sit in a meeting room and worthies troop in one by one, to make presentations. Airport, hotel, office meeting room, hotel, airport, back. Do you really have to go in flesh and blood. Again the old argument - networking, getting to meet the people over dinner - amazing how booze is always the reason to go !

If you cut out all of the above, 95% of business travel is unnecessary. But what is the alternative. My solution is simple - embrace the internet.

Most executives have not appreciated the internet and the changes it has brought to life. Many embrace it in their personal lives, and yet, it has made very little inroads into business life. And for the record I exclude E Mail from what I mean.

Lets tackle networking and personal contact - which is often the reason touted for travel. The internet has revolutionised networking beyond imagination. And yet we rarely use it in business. Just think of the very close networks many have built on line in personal life. We have reestablished contacts with our classmates from school so effectively. With My Space we have networked with complete strangers and made new and often close friends whom we may never see in person. With Facebook, we have kept in touch with all our friends even more effectively than if we could visit them once a year. Tweeting is now another social networking phenomenon. Through blogs, we express ourselves much better than if we were only to engage in a conversation. As we all know, sometimes, we are freer and more open in communicating if we don't see the person face to face. And yet in the business world, none of the above phenomenon have really found their place. A sterile CEO blog is all that seems to happen. If you want to really network, set aside 3 hours (no calls, no fiddling with the blackberry), invite as many people as you want to a web chat and you'll find you have networked far better than when you went in person and got drunk.

Web conferencing must now replace meetings and conferences completely. Just because the old man (read CEO) is uncomfortable with this technology is no reason not to adopt it.

Why do managers still travel like this. Part of it is discomfort with technology - they are still not used to it and feel uncomfortable with it. This amazes me because many of them embrace it wholeheartedly in personal life. Part of it is the bragging - how can you be a manager of consequence if you can't complain about the travelling in a party. Part of it is wanting to be "seen" at events. Part of it is that you are scared of missing the action. Maybe a little bit of all of this.

Think of what you are doing to your body. The pounding it takes from the stress, the lack of sleep, the untimely and bad food. Think of what it does to your schedule and routine - your workouts, your time at the gym, your time at the sports field back home. Think of your family. Everybody knows that they miss their children's growing years and yet they do this to themselves.

Managers know all this and yet travelling has only become worse. They need a "business" reason to stop; so let me try this on you. Every time you travel, you are adding big time to carbon emissions. Just paying a carbon tax cannot absolve you of this sin. Your company is committed to being "green". You are producing a report of how your company is acutely aware of the climate change issue and how it is acting decisively. Add a line to the report. Stop travelling and declare yourself green.

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Why does anybody borrow on a credit card ?

I got a lovely comment from Aashish Sharma yesterday, complimenting my ranting. Got me very motivated to make another rant, instead of writing about the gloomy Indian budget.

Why does anybody borrow on a credit card ? This is a naive question as millions of people do borrow on a credit card. But why ? And what are the ethics of the credit card industry ?

Of course, credit cards are incredibly convenient. Without them life would be very difficult in today's world. I remember a time, not so long ago, when Indians could not get an international credit card - so when an Indian travelled abroad he had to pay cash. I remember whenever I had to check into a hotel overseas, a strange look that said "who is this strange barbarian who does not even have a credit card ?"

Sure, credit cards bring fabulous convenience. But why credit cards ? Why not just debit cards ?

In practice, I use credit cards as debit cards. Apparently a majority of credit card users do so that way. They pay off their credit card bills exactly on the due dates. But pure debit cards are inconvenient to use (for eg on line) and are not as widely accepted. Hence I use a credit card but have set up arrangements with my bank that the bill is automatically debited to my bank account on the due date. So what I really need is a universally accepted debit card, but since that is not popular, I have converted the credit card into a debit card for all practical purposes.

But therein lies the rub. I get free credit for 20 days or so. This carries no cost. I don't want this credit, but I have no choice. And the card issuers have to make money; they are hardly in this for charity. So what do they do ? They charge the idiots who don't repay on the due date and therefore borrow on their card, usurious interest rates. 20%+interest rates - even Shylock would take his hat off to that. They camouflage it in shamelessly misleading claims - Only 2% interest with a small asterisk which in a bottom footnote in font size of 2 is explained as 24% APR, as if any sane person can understand what an APR is.

The credit card industry is the only strange animal that hates people who pay back their dues and loves people who don't. This itself tells you about the ethics of this business.

Only an absolute fool would borrow on a credit card. But there are many people who deliberately, or inadvertently, are fools. They buy some nice goodie, on an impulse, using a credit card. When payment time comes, they don't have the money, for they have bought something they can't pay for. The lovely credit card company tells them, they need to pay only 10% - what wonderful chaps they are ! And so the spiral starts.

What sort of stuff would you buy on a credit card anyway that pulls you into debt ? If you buy a house, you can get a housing loan at sensible rates of interest. If you buy a car you can get financing sensibly. Ditto for most goods that you really need and aspire for. Its the vanity and the luxury for which you can't get sensible finance. Do you really want to pay 24% interest to own this rubbish. I cannot think of a single product (a house included) that can justify a 24% interest.

I hold credit card companies on roughly the same status as drug dealers. They aggressively market the stuff to people who should not be having one. They put out blatantly false and misleading ads. Besides the fraudulent positioning of the interest rate, they dangle promises of fantastic wealth and luxury before a dewy eyed vulnerable guy. They promise "instant" cards - all you to have to show is that you are a living human being. They pester you on the phone with unwanted sales calls. They even send you a card in the post without your asking for it (the number of times this has happened to me is not funny). They stand outside my office building in colourful booths with nice pamphlets and pretty young things, ready to ensnare some unwitting soul and lead him by the hand into doom. They make it easy to have the first fix. they even give you the second and third fixes before you have had to pay for the first one. And then when you are truly hooked, they come at you with knives and shotguns. The only difference I can see with a drug dealer is that he stands in the street corner, while this lot stands in the middle of the street.

Yeah, we live in a free world. People can do what they want and must take responsibility for it. Oh yeah - then why don't we legalise marijuana, cocaine, ecstasy ...

I unfortunately know of too many people who have been ruined by this drug. I know of a guy who 's credit card company had started to directly recover from his salary and his monthly take home income had come to Rs 400 ($ 10). I know of a guy who became bankrupt after 15 years of working. I know of a guy who was beaten by an over zealous recovery company while his scooter was being repossessed. I know of a girl who's family had to sell the mangalasutra (in Indian tradition this is the symbol of a married lady and something you would never never sell) to keep up with the monthly minimum payment on the card. I could go on and on.

Hopefully technology changes will render this industry obsolete. Payments through mobile phones will become more and more popular. Other online instruments will come into being. If the present financial crisis has any positive fallout, it might be that easy credit might not be there anymore.

When this industry fades into oblivion, If I am around, I will write a long obituary. Unfortunately, I don't think this will permanently go away, just as drugs will never go away. Meanwhile I will contend myself with ranting.

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Even the rope is gone

A few days ago I posted twice on the Indian budget, ahead of the next year's budget that was presented a couple of days ago. Click here and here for these posts.

I argued that making a massive loss and therefore simply printing more money (officially called debt) was just unsustainable. Little did I realise that the Budget for 2008-09, on which I based my P&L account was stunningly way off the mark.

The Finance Minister's speech was 7500 words long. 7100 of them was blah blah. He patted himself on the back so often, that I am surprised he's still walking straight. In 400 words (I counted ), he threw a bomb.

He said expenditure would actually be 20% more than the budget. And revenues would be 8% lower. So the "loss" would be 437% higher. No problem - he would just print more notes - increase debt in politically correct terms.

And where did he spend all this money. The biggest spending was in fertiliser subsidy where he spent more than 100%. He spent more on food subsidy. He wrote off loans to "farmers" - standard tactics to buy votes in India.

This is after doing a virtual accounting fraud, by directly issuing bonds to oil companies (for petroleum subsidy) and believe it or not, even more bonds to fertiliser companies, and thereby not showing this as expenditure at all . In reality expenditure is over budget by 40%. Even Satyam Computers pales into insignificance in comparison to this accounting sleight of hand.

I am absolutely certain that these "Revised estimates" for 2008-09 are bunkum. When the actuals are totalled many months later, you'll see buried in the fine print, expenditure having overshot by another 20%. Oh sorry - actually that may not happen. Since government operates on a single entry cash accounting system; simply delay payments and push it to next year.

Elections to the parliament are coming in 3 months. If we are sensible, we should demand a law preventing government from borrowing and forcing balancing of budgets. But we know what we'll get - free colour TV, loan waivers, free power to farmers and god knows what more innovations.

The Indian rope trick involved a magician throwing a rope up, which would stand erect and climbing up the rope and disappearing. I think we should revise this trick to no rope, no magician, no nothing, just Pooh !

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