21.04.2008

• UBS sweats over subprime crisis
• The world’s largest bank also seems to be the one suffering the largest subprime losses. Reportedly it has lost $37 bn in assets because of the subprime crisis.
• This has forced it to ask investors for emergency cash twice in two months.
• Government set to ease ECB norms for infrastructure firms
• There is an overall cap of $22 bn for all ECBs in the country. But in spite of this cap, the total amount raised as ECBs in the country during 2007-08 stood at over $26 bn.
• The ceiling for individual companies is $20 mn for permissible end-uses of ECBs. Under the current guidelines all companies registered under the Companies Act can tap overseas markets for funds up to $500 mn under the automatic route, subject to end-use restrictions.
• As infrastructure companies have been adversely impacted by these restrictions, the government seems to have made up its mind to relax some of the restrictions.
• Why should India be cautious about establishing an SWF? (Sovereign Wealth Fund)
• We should not be blindly aping some of the countries like Abu Dhabi or China in rushing ahead with the establishment of an SWF for the simple reason that those countries are running current account surpluses; while that is not the case with us. We have current account deficit. But we still keep accumulating dollars because the inflows are constituted by liabilities on capital account – net FII investment, external debt etc. These are returnable. That’s why we have to be more cautious.
• Having been wisened (or shall I say chastened) by RBI Guv’s seemingly conservative (but proved to be good in the medium term) disposition towards inflation, I think we better pay heed to his caution on this score too.
• Tragedy of commons and modern finance
• This article is not for the faint hearted; surely. Those of you with some finance background will relish this. Those who don’t have the stomach for it are advised to skip it.
• But one interesting aside from this is this – the phrase “The Tragedy of the Commons”. What this phrase speaks of is the conflict over finite resources in situations where individual interests clash with the common good. This was first used by Garrett Hardin in his 1968 essay “The Tragedy of the Commons”.
• Want to know how individual action by the USA has led to the depletion of a finite but intangible, common resource viz., financial stability? Then read the article. It is from one of my favourite authors: Mythili Bhusnurmath.
• Scientists create smallest transistor
• It measures a little bigger than a molecule. This is expected to spark the development of super-fast computer chips in the future.
• Using the world’s thinnest material called graphene, a team at the University of Manchester has produced the transistor which is one atom thick and ten atoms wide, marking the first true electronic nanocomponent.
• Four years ago, they discovered graphene, the first known one atom-thick material which can be viewed as a plane of atoms pulled out from graphite. Unlike other known materials, graphene remains highly stable and conductive even when it is cut into devices one nanometre wide.