12.12.2008

Politics & the Nation

• Today is Word Energy Day.  Some facts worthy of our note on energy scene:
• India is the 11th biggest energy producer in the world; we produce 2.4% of world's total energy.
• We are world's sixth largest energy consumer; consuming about 3.3% of world's total energy.
• About 62% of our power is produced from coal fired thermal plants.
• About 70% of coal produced in the country goes into power generation.
• Energy-GDP elasticity is around 1.5.  This is far higher than that for the developed nations.
• Energy-GDP elasticity is the percentage change in energy consumption to achieve one per cent change in national GDP.
• Experts are showing that LED lights can save energy consumption tremendously and also be environment friendly.
• But the cost of a typical streetlight made of LED is about Rs. 20,000.
• UN Security Council imposes sanctions against LeT
  
• In a major diplomatic success for India, the UN Security Council imposed sanctions on Jamaatud-Dawa and declared its chief Hafiz Mohammed Saeed, Mumbai terror mastermind Zaki-Ur-Rehman Lakhwi and two others as terrorists.
  
• With the international community closely watching its moves, Pakistan, which is bound by the UNSC decision, banned the Jamaat-ud-Dawa, put its chief Hafiz Mohammed Saeed under house arrest, sealed offices of the group and put the four terrorists on its terror list.
  
• Simultaneously, the State Bank of Pakistan directed all banks to freeze the bank accounts of the Jamaat and the four LeT leaders, including Saeed, who were declared terrorists subject to sanctions.
• Though India has every reason to be happy, all these steps still amount to a little more than an eye-wash.  Only when the international community ensures that the terrorist outfits operating out of Pakistani soil are targeted for surgical strikes under the auspices of a body like the UN, can there be some change on the ground realities.  Though that by itself is no guarantee for preventing future terrorist strikes, such a license does bring about a perceptible difference.  
  
• We don't need asteroid strikes, nor inter-galactic people to invade us (remember some Hollywood movies based on these themes?), our own terrorists and inept governments worldwide are enough to see us wiped out.  See what is happening in Congo, Zimbabwe, Pakistan-Afghanistan, Iraq etc., and you can't come to a different conclusion.
  

Finance & Economy

• You might remember the government's efforts at boosting investments in infrastructure sector to perk up domestic demand.
• Ever wondered how does massive investment inflow into infrastructure is going to perk up demand?  If you have patience, I strongly recommend a read of this op-ed.  If you are running short of time and have a counter question as to why free flow of credit to big and small businesses will not have the same imapct, here goes my excerpt:
• The answer to this is quite clear: in these tight times there is no guarantee that credit given to big business will be spent and not hoarded. After all Ratan Tata's recent cautionary letter to his CEOs does ask them to exhaust credit lines and almost stall expansion. 
  
• Second, even if big business did spend much of the new credit obtained it would be on capital intensive machinery, etc, with vast gestation lags; little labour would be employed and therefore, very little demand would be generated for items of mass consumption.
  
• As far as small business is concerned there are limits to the amount that can be disbursed; a careful time consuming process of screening is also needed before actually allocating credit. Thus, because of the reasons mentioned above, credit to business can only be a measure which supplements more central ones such as infrastructure spending; on its own its capacity to bail out the economy has dubious potential.
• Though it might appear that we are too op-ed oriented in our approach to remaining informed, I can't help but point out whenever we get such excellent pieces from such well-known authors as Manoj Pant.
• Strongly recommend a read of today's op-ed piece by him on why the WTO is more important today than it ever was in handling the current gloabl economic crisis.  In the process he lets us on to some snippets worthy of our note:
• The US accounts for about a third of the world's demand.
• It was the US Smoot-Hawley Act of 1930 which has set off tariff wars for the first time in modern times.
  

International

• US Treasury Bills; another bubble waiting to burst?
• Many of you knowing as you do, my pessimistic outlook on the dollar (medium to long term), will likely see such a question as one of my pet themes.
• Be assured; this is not from me; this is from a news report on the subject.
• It says that the yield on US Treasury Bills has turned negative for the first time ever; since US started selling its debt way back in 1929.  What does this point to you?  Isn't it reason enough for sovereign wealth funds and other countries to park their reserves elsewhere, other than US Treasuries?  When this happens, what would happen to the US dollar?  It has to find its feet on the ground.
• What the Russians are doing at this juncture, I am sure, is going to land them in more trouble, than what they can comprehend.
• So, what's my prescription?  Invest in Gold or stay put in it; as Indians do.  Is any Russian listening?  Alas, we don't have Russians amongst our blog readers.
  
• Auto fuel price deregulation?
  
• The government is reportedly working on deregulating the prices of petro fuels, while still having control over LPG and Kerosene sold through PDS system, the two commodities that it considers sensitive.  
  
• The new regime is expected to be put in place well before the general elections.  But, will it succeed this time?  Earlier also governments toyed with the idea of deregulation but developed cold feet when fuel prices headed north.
• As per the current subsidy-sharing mechanism, the under-recoveries of oil companies are equitably shared by upstream companies, ONGC, Gail India and Oil India, the three oil marketing firms and the government, which issues oil bonds in lieu of its share of the burden.

Science & Technology

• Black hole at the centre of the galaxy
• German astronomers have reportedly found a supermassive blakchole at the centre of the galaxy.  They named at Sagittarius A.  The black hole had a central mass concentration of four million solar masses.
• The study also enabled astronomers to calculate the distance of the earth from the center of the galaxy, now measured to be 27,000 light-years.
  

Education

• What a proud moment for India!
• India donates $4.5 mn to Harvard to set up Amartya Sen fellowships
• Read this story. It is self explanatory.
• Some of you may balk at this; I suspect.  But my feeling is that certain institutions like Harvard, our IITs and IIMs should be shown that kind of indulgence.
  

Environment

• Shark fin soup and the cruelty meted out to sharks
  
• In the East Asian countries -- especially China, Taiwan, Singapore and HongKong -- shark fin soup is considered a delicacy.  
• Because of this, sharks are increasingly being hunted in the world's oceans to satiate this demand for fins.  Reportedly shark fins sell for about $500 a pound. 
• The most cruel part of fin hunting is the method employed.  The shark's body is not considered a delicacy.  Hence, after the fins are chopped off, sharks are thrown back into the ocean and left to die.
• Sharks which have been living on the Earth for the past 400 mn years, now seem to have met their nemesis in humans, whose appearance, going by various view points, cannot precede 7 mn years.
• Would you like to take a bet on shark's survival?  Are the scientists' and environmentalists' worries about sharks getting extinct in a matter of time, real?  I would not like to support their fears.  Having seen 400 mn years, would sharks be totally annihilated by an animal which is just 7 mn years old at best?  I doubt it.