19.11.2008

Finance & Economy

• ATF to be given 'declared goods' status
• You might have noticed that ATF (Aviation Turbine Fuel) prices have been on an upswing for most part of this year and have pushed the airlines into losses because their share in operational costs has gone up from about 35% to almost 60% or 65% in some cases.
• The government is mulling giving declared goods status to ATF. "Declared goods" status means bringing ATF under a tax regime which will ensure that it is not taxed at a rate more than 4% either in inter-state trade/commerce or within a state. This status is conferred by adding the commodity to the list of goods mentioned in section 14 of the CST (Central Sales Tax) Act. Section 15 of the Act lays down the restriction that no state sales tax law can impose sales tax which is more than 4% on any declared commodity.
• As the passage of a bill is unlikely given the short time that is there for the central government, it may most probably come in the form of an ordinance. But as and when it materializes, it will bring a huge relief for the aviation industry in the country and also bring it more or less on par with the international taxation regime.
• Citigroup delivers a shocker
• It announced plans to cut some 52,000 employees, or 14% of the bank’s global workforce, over the next year. It has a global workforce of about 3,72,000. Amid a pall of gloom staring it in its face, these plans did not enthuse any stakeholder -- the employees, the shareholders, the Wall Street. But it appeared to have no choice in the wake of declining profits and the battering its stock received on the bourses.
• Reasons why the proposed SEBI move of segregating retail and corporate investments in mutual funds is good
• Only yesterday we noted that SEBI is mulling some moves to protect the interests of the retail investor in mutual funds. Look at some sound argument from today's ET editorial:
  
• Clubbing retail investors together would help provide homogeneity to the scheme in terms of investment behaviour, ensuring that action of a set of investors does not hurt the interests of others. It would introduce transparency in levy of various charges.
  
• Given that the current global financial crisis is the result of failure of some big players in the developed world - notably the US and the EU - is there a case for establishing an Asian Monetary Fund? So that Asia can protect itself from the ravages of a crisis spreading through it?
• The verdict is a no-brainer. What we need is not another island that is based on inequalities -- either financial or geographical. Instead what is badly needed is recognizing that it is in the collective good that the individual good is ensured. Hence the way forward is an urgent reform of what is bad in the global institutions like the IMF and the World Bank. Dismantling the voting preserve of the so called developed countries (which increasingly are looking like as if they are set to claim the 'developing country' tag) in these institutions is a must. Look at some good debate on this issue in today's ET here.
• In spite of the US being the epicenter of the current financial crisis, why is the dollar appreciating against major currencies? Logically it should be depreciating; know?
• I have often said that this is due to pure technical factors and the current strength of the dollar is not based on fundamentals and I have taken a bet that it will eventually start depreciating against major currencies in course of time. Take a look at a couple of these 'technical' factors that were reeled out by today's article in ET here. I excerpt two of them for your ready reference:
• Firstly, it is the denomination of the subprime mortgages in dollars that is the cuase. Due to dollar-denominated subprime mortgages, financial assets of some of the US-based bankers suffered defaults and the asset bubble went bust. This led to a sudden surge in demand for the dollar in the US to honour the financial obligations of banks. So, foreign institutional investors and US bankers started liquidating their non-US dollar denominated assets in India and other countries and remitted the net dollar discounted amounts back home to the US. This led to a surge in demand for the dollar, resulting in an over-supply of the rupee in the domestic market. This is why the dollar is appreciating despite the US economy not doing well even as that country itself is the originator of the present financial crisis.
  
• The other factor which has led to the dollar's appreciation is that after the onset of the current financial market crisis, almost all other countries have been resorting to liberal monetary stances to increase liquidity in domestic markets. Central banks across the world are trying to sustain the credit flow by reducing cash reserve ratios, slashing repo rates etc. There have been relatively greater cuts in the bank rates in India than the corresponding Fed rates in the US. Hence, there is a relatively greater cut in the interest rates for the Indian rupee than the rate for the US dollar, triggering a foreign exchange rate movement in favour of the dollar.
  

Political

• Nehru award conferred on Hosni Mubarak
• The Nehru award which was announced for the Egyptian President Hosni Mubarak about 13 years ago is finally awarded to him on his current trip to India.
  
• Mubarak was honoured for his "unique role in providing stability and progress to his country, in upholding the Arab cause, in promoting peace and understanding in the region".
  
• The award, which carries Rs 25 lakh in cash and a citation, was conferred at a glittering function attended by Vice President Hamid Ansari, Prime Minister Manmohan Singh, his senior cabinet colleagues among others.
• The Award is being given away annually since 1965 for outstanding contribution to the promotion of international understanding, goodwill and friendship among peoples of the world.
• SACOSAN
• The third South Asian Conference on Sanitation (SACOSAN) was held in New Delhi on Tuesday.
• The Prime Minister said that sanitation has to be located in an integrated framework of public health policy to ensure that sanitation activities are indeed adequately funded.
• Do you know that 20 per cent of toilets built in the country are not functional due to lack of adequate maintenance and poor construction?
• "Nirmal Gram Puraskar" is an incentive based scheme given to gram panchayats for achieving complete sanitation facilities in their villages by the Rural Development Ministry.
  

Culture & Arts

• Mickey Mouse turns 80
• 18th November 1928, is widely considered the official birthday of Mickey Mouse, although he was born of the imagination of Walt Disney months before his movie debut and also featured in a short animated film called "Plane Crazy", which was made before "Steamboat Willie" but released afterwards.
  
• Mickey Mouse was created almost by accident: Walt Disney's first cartoon character was a rabbit called Oswald, but the man who was to rise to become a pre-eminent force in global entertainment lost the rights to the rabbit in 1927 and returned to the drawing board. He came up with a mouse, whom he wanted to call Mortimer. According to popular legend, his wife preferred the name Mickey, and Walt Disney deferred to her choice.