06.11.2009

Politics & the Nation
  • Maoists ready for talks, demand withdrawal of security forces
    • Faced with an impending security force operation, a top leader of the Maoists on Thursday said they were ready for talks with the Centre provided some of their conditions were met, including withdrawal of paramilitary forces deployed in Naxal-hit States.
    • Read more on it here.
Finance & Economy
  • Bold moves from government on divestment?
    • Prime Minister Manmohan Singh on Thursday put an end to the dillydallying on divestment in public sector companies by approving a plan to partsell shares in them that may help the cashstrapped government raise at least Rs 60,000 crore and reduce its dependence on market borrowings to fund the building of roads, hospitals and schools.
    • Investors cheered the decision, interpreting it as a sign the government was returning to the path of bold economic reforms that could help contain the strain on its finances, after it cut taxes and raised spending in the last year to contain the damage arising out of the global credit crisis.
    • A subtle change in the way the divestment proceeds are to be used?
    • Although government-owned companies such as NTPC and Power-Grid have sold shares in the past few years under Mr Singh, they could not be used to fund government expenditure as they were kept aside in the National Investment Fund for welfare schemes and to bail out public sector companies.
    • The government has reportedly now decided against parking the divestment proceeds in the NIF.
    • Close to Rs 5,000 crore that the government raised through divestment of its stake in NHPC and Oil India will now be going into capital expenditure on social sector schemes determined by Planning Commission and the department of expenditure.
    • Use of disinvestment proceeds would free up government resources to that extent or bring down its fiscal deficit in line with the targets set in Budget 2009-10. The government targets fiscal deficit at 5.5% in 2010-11 and 4% in 2011-12.
    • But Trinamool and DMK are obviously unhappy with the decision. Their stated position is very well known. Both of them oppose divestment in PSUs. Whether Congress can weather this opposition this time remains to be seen.
  • Is another revolution in the offing?
    • This revolution is about investing in mutual funds. This report says that SEBI is toying with the idea of doing away with entry loads in mutual fund investing for investors. If can bring that about, that would be a real revolutionary effort.
    • Do read the story in full.
  • We are sure you all know a bit or two about carry trade by now.
    • If you do not, then it is time for you to read this article that appeared in ET today and get a lowdown on it.
    • Carry trade is considered very risky. Why?
    • Firstly, history shows that carry trade is risky. Remember the LTCM debacle of 1998? Such events lead to very wild fluctuations in currencies which makes carry trade highly risky.
    • Secondly, carry trades can go from profit to loss with almost no warning.
    • Thirdly, if there is no forex intervention and foreign currencies appreciate, the negative borrowing cost of the carry trade becomes more negative. If intervention or open market operations control currency appreciation, the ensuing domestic monetary easing feeds an asset bubble in these destination economies. So the perfectly correlated bubble across all global asset classes gets bigger and frothier by the day.
    • Fourthly, many asset prices now seem to be extremely dependent on the glut of cheap liquidity that comes from the dollar carry trade. The implication is that if the dollar rises and carry traders bail out of their assets again, we’ll probably see another sharp global sell-off in all assets.
  • On India's inward remittances
    • Globally, India is the largest recipient of inward remittances which is effected through money transfer agents and banks. Banks take around a day to a month, depending on the choice of service.
Medicine
  • New therapy eradicates cancer cells without targeting healthy ones
    • Researchers are close to developing a cancer treatment that kills malignant cells whilst leaving healthy cells untouched.
    • Led by Professor Cohen-Armon of Tel-Aviv University, the researchers found that potent phenanthridine derived polyADP-ribose polymerase (PARP) inhibitors efficiently eradicate MCF-7 and MDA231 breast cancer cells without impairing normal proliferating cells, such as human epithelial cells (MCF-10A), nor normal non-proliferating cells, such as neurons and cardiomyocytes.
    • PARP inhibitors were originally designed to protect cells from cell-death under stress conditions (e.g. stroke or inflammation).
    • Read more about it here.
Sport
  • What a loss?
    • It was a sad day for India. In spite of a brilliant knock by Tendulkar, the team somehow couldn't just manage to win. It loses by a paltry 4 runs!!
    • Let us wish them well for their next match.
Language lessons
  • apothecary: Noun
    • A health professional trained in the art of preparing and dispensing drugs
  • vicissitude: Noun
    • A variation in circumstances or fortune at different times in your life or in the development of something; Mutability in life or nature (especially successive alternation from one condition to another)
  • explicate: Verb
    • Make plain and comprehensible; Elaborate, as of theories and hypotheses
  • panoply: Noun
    • A complete and impressive array
    • eg: ...So proactive policy for the latter would have beneficial effects and spillovers across a panoply of sectors as varied as energy systems, value-added plastics and information technology.

2 comments:

Satish Mantha said...

Is this the link that you referred to regarding carry trade?

Thank you.

icamaven said...

Yes. Thanks. Since gave the link.