Politics & the Nation
  • Congress Party's manifesto
    • Take a look at this graphic which gives a gist of the manifesto.  Very well written.
  • With the competition for designing a symbol for our Rupee on progress, it would be interesting to know a bit about other currencies' symbols; isn't it?
    • Let's look at the story about dollar symbol: The origin of the two lines in the dollar is not clear, but one theory takes it back to the ‘thaler’ issued by the Holy Roman Emperor Charles V. His global empire included Spain, large chunks of the rest of Europe and must of South America, and the lines represented the Pillars of Hercules, the two mountains on either side of the Straits of Gibraltar at the empire’s heart. A S-shaped scroll in between them, with a slogan, became the dollar sign. 
Finance & Economy
  • Inflation touches record lows!!
    • Inflation has fallen to 0.44% for the week ended March 7, 2009.
    • Deflation is defined as a sustained decrease in the general price of goods and services. 
    • Disinflation: a continued fall in the inflation rate.
  • An explanation as to why deflation is a bigger evil than inflation: (excerpted from today's ET editorial)
    • Just as high inflation reduces the real value of money and has negative welfare implications apart from affecting investment decisions adversely, deflation, though it might seem to increase the real value of money, is just as avoidable from the larger economy perspective. Most economists agree that between inflation and deflation the latter is the worse evil. The effects of modest, long-term inflation are less damaging than deflation. This is because when prices are falling, consumers tend to delay their purchases in the hope they will be able to buy later at still lower prices. This reduces overall demand and economic activity. Deflation also raises real wages at a time when falling demand is gnawing at companies’ profits, resulting in layoffs and rising unemployment.
  • SEBI falls in love with complex derivatives
    • Even as the West is reeling under the aftermath of the destruction wreaked by complex derivatives, our own SEBI appears confident enough of allowing some complex derivatives.  Some of the things that it is looking at introducing include: 
    • Over-the-counter (OTC) products, exchange-traded derivatives products and exchange-traded third-party products.
    • In this context, some exposure to some terminology would be interesting:
    • What are OTC products?
      • OTC products are derivatives contracts that are traded directly between two parties, without going through a stock exchange or any other intermediary. 
      • The segments where OTC market is allowed at present:
      • In interest rate, currency and commodities derivatives. However, there is no such market in equities, and any transaction of this nature is not legally enforceable.
    • What are structured products?
      • Those tailored to suit the buyer’s requirements — purely for institutions, banks and insurance companies.  They offer greater freedom for domestic mutual funds to lend shares, permission for hedge funds to participate in the options market. 
      • An example of a structured product would be a contract that offers the holder returns based on the movement of the Nifty, and a pre-decided combination of stocks. 
  • Remember anything about the gold deposit scheme?
    • Banks -- especially the SBI -- are reportedly relaunching the gold deposit scheme in view of the tremendous upward movement seen in gold prices of late.
    • During the investment tenure, the deposited gold will earn an interest, which is currently tagged as 1% (3 years), 1.25% (4 years) and 1.5% (5 years). 
    • The investment shall be locked-in for one year. Premature withdrawal, after the lock-in period but before the maturity, shall attract a penal interest of 0.5% if withdrawn within 3 years and 0.25% thereafter. 
    • However, unlike the regular deposits, interest here is calculated in grams and not in rupees. Thus, an investment of 500 grams of gold for three years shall earn 5 grams of gold as interest per annum, compounded annually. 
  • A factor that explains the rise of multiplexes:
    • The increasing use of cars and need for space to park the vehicles. Typically, a parking lot for 100 cars occupies 30,000 sq ft, while a 500-seat theatre occupies only about 4,000 sq ft. Achieving 40% occupancy in a 500-seater is not possible today. Only a multiplex which can survive on low occupancy and capacity by charging high rates. 
  • India wins the first test at Hamilton
    • India beat New Zealand by 10 wickets in the first cricket Test to take a 1-0 lead in the three-match series. 
    • New Zealand were all out for 279 in their second innings on the fourth day of the match as Indian spinner Harbhajan Singh returned a brilliant six-wicket haul. India chased down the requires 39 runs in 5.2 overs. 
    • First innings: New Zealand:279 India:520 
    • Second innings: New Zealand: 279 India: 39