Indian Current Affairs: 19.01.2009

Politics & the Nation

Having become part of Mumbai lore now for the past 6 years, this marathon (some reports cause confusion about it by saying that it is a half marathon) means something for everybody that takes part in it. It supports many causes. And this year's cause could be easy to guess: peace. A strong message to terrorists that Mumabikar's spirit is not down in spite of the 26/11 attacks.
Almost every celebrity and CEO of India Inc participated in the marathon.
Kenneth Mugara from Kenya won the marathon in a record time of 2 hours, 11 minutes and 51 seconds.
The causes supported through the marathon were as diverse as dyslexia, solar lighting, support for the environment, street children, AIDS awareness, senior citizens and wildlife protection. The mantra of the marathon was ‘Feel the spirit’.

Finance & Economics

The first quake was the subprime mortgage crisis. Then came the excess-leverage crisis in 2008 that downed the five biggest investment banks. The third quake was the collapse of the real economy in October.

The Benami Transactions (Prohibition) Act 1988 governs dealings involving proxies to conceal the identities of the real owners, but the law has yet to become operational because its rules have not been firmed up.

A very good explanation about how or why the present economic crisis occurred in the US

If you have time, read this article in full. For those of you who don't have the time or patience, these excerpts would be worth recording:

After the US Glass-Steagall Act, which separated investment and commercial banks, was repealed in 1999 commercial banks also were able to underwrite and trade asset-backed securities, etc., through off-balance-sheet structured investment vehicles. The US Securities and Exchange Commission (SEC) was now the regulatory authority for securities and brokerage operations of investment banks.

The Commodity Futures Modernisation Act of 2000 exempted credit default insurance from regulation by calling them swaps. The post-Enron 2002 Sarbanes Oxley Act allowed off-balance-sheet activities so long as other entities held the risks and rewards, thus encouraging the “originate and distribute” model. Amendment to the Community Reinvestment Act in the midnineties allowed securitisation of subprime mortgages to make home loans possible for low-income categories, since the Clinton administration wanted to expand home ownership.

In April 2002, the government had ended the monopoly of public sector oil companies in fuel retail. This paved the way for private oil companies such as RIL, Essar Oil and Shell India to open petrol pumps. In the same year, the government also distanced itself from determining retail prices of auto fuels by putting an end to the administered price mechanism (APM).

However, later, due to surging global oil prices, the government forced public sector oil companies to sell petrol and diesel below cost. This created a non-competitive business atmosphere, resulting in RIL closing its 1,671 pumps in April last year. Essar Oil and Shell India also closed some of their retail outlets.

International

We have seen various groupings of countries like the G8, the G20 and G77 and so on.
But G30? It is a grouping of individuals. This is a highly influential grouping of experts in various fields. It has recently released a set of recommendations for putting the global finance in order.
If you have the patience, do take a look at the recommendations here.
Will this be the foundation for a new Bretton Woods? Most likely; but let's wait and see. You will find very big names in this grouping -- including members of the past, present and future American and EU administrations. That's where it derives its power/influence from.

The case for coordinated action on announcing fiscal stimulus packages, as explained by Kevin Rudd, the PM of Australia:

First, there are real and psychological gains. Stimulus measures from one country spill over to their trade partners, creating an additional boost. Co-ordination is also important to mitigate the volatility in currency and bond markets that can be an unintended consequence of uncoordinated policies.
Second, co-ordination is an important defence against ‘beggar-thy-neighbour’ policies.
Third, international co-operation is essential because this crisis has important implications for developing countries. They did not create this crisis but have been badly damaged by it. The global recession in advanced economies has weakened export opportunities for emerging countries. In addition, the financial crisis has restricted credit flows — with spreads on debt to developing countries having widened significantly.
A fourth reason for co-ordinated action is the unprecedented opportunity the crisis presents to combine shorter-term stimulus requirements to boost growth and employment in 2009 with the longer-term requirement to lift global productivity growth and accelerate the transformation to a lower-carbon economy.

Medicine

UK researchers are reported to have identified the mutation in the heart protein gene MYBPC3 five years ago in two Indian families with cardiomyopathy - a disease causing deterioration of the heart muscle. Their further research into it has suggested that mutation probably arose around 30,000 years ago.
Heart disease is a massive global killer, and it is predicted that by 2010 India's population will suffer approximately 60% of the world's heart disease.

Sports fest

Indian Current Affairs