Politics & the Nation
  • Change of guard at ICICI Bank
    • Ms. Chanda Kochhar is a familiar face to corporate India.  She is slated to take over from KV Kamath, the outgoing CEO & MD in May 2009.
    • At 46, she is one of the youngest CEOs our banking sector had ever had.
  • An excellent graphic depicting Pakistan's position as the epicentre of terror
    • Here it is.
    • It is interesting to note that Nawaz Sharif, the former PM of Pakistan has blown the lid of Pakistan claims that Kasab is not from Pakistan, by confirming that he is from Faridkot.
  • Unorganised Sector Workers’ Social Security Bill 
    • India's unorganized sector is reportedly 94% of the labour force of about 400 million.
    • The bill which has been passed by the Parliament seeks to constitute a National Social Security Advisory Board to recommend suitable welfare schemes for unorganised sector workers. 
    • The Centre may notify suitable welfare schemes relating to life and disability cover, health and maternity benefits, old age protection or any other benefits.
    • One criticism about the bill is that it did not provide a permanent funding mechanism for making its lofty intent workable.  Instead, it was left to the whims and fancies of the individual governments.
  • Crude at record lows since 2004
    • It touched $33 per barrel; a price seen about 14 years ago.
    • Opec president Chakib Khelil, says that this could be new the floor price for oil for now.
  • US automakers get a breather from the US government
    • The US announced a $17.4 bn rescue plan for its troubled automakers - GM and Chrysler, amidst calls from the President for elimination of a ‘jobs bank’ program — negotiated by the United Auto Workers and the companies — under which laid-off workers can receive about 95% of their pay and benefits for years. Early this month, the UAW agreed to suspend the program.
    • Whether or not this results in some fab shedding by the companies needs to be seen.
  • We need not be ashamed of Bofors!
    • If you look at what Seimens is caught doing, surely we need not be ashamed of Bofors or any other corruption scandal for that matter.
    • It devised novel ways to funnel huge sums to corrupt officials and politicians across the globe. On Monday December 15th it pleaded guilty to charges of bribery and corruption and agreed to pay fines of $800m in America and €395m ($555m) in Germany, in addition to an earlier fine of €201m.
    • Should we praise it for its admission of guilt?  Or should we draw comfort that we have illustrious company to keep?
  • Watergate scandal
    • Many of you might not have been born when this scandal happened.
    • It was about the abuse of US Presidential powers in the White House during Richard Nixon's presidency.
    • Following some remarkable investigative journalism from the Washington Post, the President had to resign in disgrace in 1974.
    • Why do we need a recap of this now?
      • Because one Mr. Mark Felt, famously known as Deep Throat, the mysterious FBI source behind the exposure of the scandal had died at the age of 95.
Finance & Economics
  • Existing rules regarding share buybacks by corporates
    • Relevant for us in the context of Satyam's aborted attempts at investing in related firms.
    • The buyback norms in the Companies Act, 1956 allow a company to purchase a maximum of 25% of its paid up equity capital in a financial year once a special resolution is passed at a general meeting. The shares bought back have to be compulsorily extinguished within seven days of the buyback. 
  • India's PSUs sitting pretty on a cash pile of Rs. 100,000 lakh crore
    • India’s top 30 non-financial PSUs were sitting on a cash pile of nearly Rs 1,00,000 crore at the end of FY08, a 100% growth over FY06. What is interesting is that PSUs were able to accumulate this cash despite the poor profitability of oil majors, which account for a bulk of PSUs’ revenues. 
  • On why 'quantitative easing' is called as such:
    • We have noted about quantitative easing on a couple of occasions earlier.  As central banks run out of their ammunition by fiddling with interest rates, they are resorting to buying up treasuries and securities from the banking system to keep more money in banks' vaults.
    • This is called “quantitative easing” because the effect of these measures is to control the quantity rather than the cost of credit. 
  • IPL trading window set to open on Monday
    • This enables each IPL franchise to purchase a maximum of four players through a trading window, which will remain open for a month from Monday, December 22. 
    • There will be no limit on the number of players that a franchise can sell and a cap on the fees payable to players is also absent. 
    • IPL has also laid down guidelines for the second player auction that will take place on February 6, 2009. This auction will be open for players who did not participate in the first season. Each franchise can spend a up to $2 million in the auction. As was the case with the first auction, all overseas players require a no-objection certificate from their respective cricket boards to play in the league.

1 Comment:

Adam Smith said...

Why Don't You Hedge Your Economic Future?

The Economy? They Paint It Black.
Let's Paint it Green, Will You?

What Are They Offering Except to Wait, Suffer and Be Patient Till, On the Long Run, The Crisis is Over?

A milder avatar of the present crisis started in Japan in 1993. Its consequence was called "Japan Lost Decade". It is 15 years old now.

Believe us they tried everything available: Keynesian Fiscal Policy, Zero Interest Rate Policy (ZIRP), Quantitative Easing... You Name It!

DIE ZEIT: Can the right monetary and fiscal policy keep the US out of a recession?

Master Conductor Alan Greenspan:

"Probably not. Global forces can now override most anything that monetary and fiscal policy can do. Long-term real interest rates have significantly more impact on the core of economic activity than the individual actions of nations.
Central banks have increasingly lost their capacity to influence the longer end of the market.

Two to three decades, ago central banks were dominant throughout the maturity schedule.
Thus, the more important question is the direction of long-term real interest rates."

Sir Alan 'El Maestro' Greenspan

The Great Irony of Success
© ZEIT online, 30.1.2008

"The long run is a misleading guide to current affairs. In the long run we are all dead.

Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is past the ocean is flat again."

Sir John Maynard 'Invisible Hand' Keynes
A Tract on Monetary Reform (1923) Ch. 3

We Can't Afford to Wait That Long. Or Can You?

"The decadent international but individualistic capitalism, in the hands of which we found ourselves after the war, is not a success. It is not intelligent, it is not beautiful, it is not just, it is not virtuous—and it doesn’t deliver the goods.

In short we dislike it and are beginning to despise it. But when we wonder what to put in its place, we are perplexed.”

John Maynard 'Invisible Hand' Keynes

1776 - Annuit Cœptis Offers Its Solution,

Dynamic on the Short Run & Stable on the Long Run:

A Credit Free, Free Market Economy

1776 - Annuit Cœptis Not Only Offers a New Idea,

It Propose Its Practical Implementation,

Its Exit Strategy.

"The composition of this book has been for the author a long struggle of escape, and so must the reading of it be for most readers if the author's assault upon them is to be successful, a struggle of escape from habitual modes of thought and expression.

The ideas which are here expressed so laboriously are extremely simple and should be obvious.

The difficulty lies, not in the new ideas, but in escaping from the old ones, which ramify, for those brought up as most of us have been, into every corner of our minds."

Sir John Maynard 'Invisible Hand' Keynes
The General Theory of Employment, Interest and Money,
December 13, 1935 Preface

"At the present moment people are unusually expectant of a more fundamental diagnosis; more particularly ready to receive it; eager to try it out, if it should be even plausible.

But apart from this contemporary mood, the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood.

Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist.

Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back. Emperors and armies come and go; but unless they leave new ideas in their wake, they are of passing historic consequence.

I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas. Not, indeed, immediately, but after a certain interval;

for in the field of economic and political philosophy there are not many who are influenced by new theories after they are twenty-five or thirty years of age, so that the ideas which civil servants and politicians and even agitators apply to current events are not likely to be the newest.

But, soon or late, it is ideas, not vested interests, which are dangerous for good or evil."

John Maynard 'Invisible Hand' Keynes,
The General Theory of Employment, Interest, and Money,
13 December 1935, p. 383.

Quoted by Master Conductor Sir Alan 'El Maestro' Greenspan.
Adam 'Defunct Economist' Smith
At the Adam Smith Memorial Lecture, Kirkcaldy, Scotland
February 6, 2005

On Friday 19th, December 2008, 1776 - Annuit Cœptis has elected its Master Conductor Sir Alan 'El Maestro' Greenspan.

In the Age of Turbulence We Want an Adventure in a New World Economic Order.

To be sure he will launch our economy as soon as he thinks it is feasible.

✔ Protect Your Economic Interests.

✔ The Numbered Account: A Ticket to Ride.

✔ The Credit Free Currency.

✔ Assets Transfer: The Exit Strategy no one Can Afford to Refuse, or Can You?

✔ A Specific Application of Employment, Interest and Money:
Why We Got Here and Why Our Exit Strategy is Credible.

In order to keep the public informed about the development of its actions, of the "catastrophic event" and avert the suicidal behaviours that are known to take place during periods of Great Economic Depression 1776 - Annuit Cœptis sponsors a Discussion - Support Group

Consider your economic environment, print and give a wide audience to this document.