17.04.2010

Politics & the Nation

• Tharoor appears to be in trouble; may lose his job
• Shashi Tharoor, who has pushed the government into a politically embarrassing corner, may be asked to put in his papers soon. The Congress leadership appears to have concluded that the minister’s continuation in the government has become untenable after it was detected that he negotiated with Rendezvous for a higher share of sweat equity for his friend Sunanda Pushkar.
• According to Section 79A of the Companies Act, 1956, a company can issue “sweat equity” only a year after commencing business. The Kochi franchise was registered only on March 17, 2010.
• This is not the only issue that the minister has failed to explain to the leadership. The company has also violated the restriction on the issue of sweat equity shares prescribed by the Companies Act, for showering largesse on Ms Pushkar. A company, it appears, cannot issue sweat equity shares for over 15% of the total paid-up capital in a year or shares of the value of Rs 5 crore, whichever is higher and the firm has to get prior approval of the government. The rules also say that no matter what the agreement between the company and sweat equity holder states, sweat equity cannot be cashed out in less than three years.
• The SEC alleged that Goldman Sachs, led by chief executive officer Lloyd Blankfein, 55, structured and marketed CDOs that hinged on the performance of subprime mortgage-backed securities. The New York-based firm failed to disclose to investors that hedge fund Paulson & Co was betting against the CDO, known as Abacus, and influenced the selection of securities for the portfolio, the SEC said.
  
• President Obama's policies are contributing to an arms race between India and Pakistan. Comment.
• If you are asked to answer such a question, ever, then this piece by CP Bhambri in today's op-ed will form an excellent answer. Take a look.

Finance & Economy

• India Inc’s foreign investments down 34% in Apr-Dec ’09
• The government cleared 2,984 proposals worth $14.3 billion during the nine-month period between April and December 2009 for investment in joint ventures and wholly-owned arms abroad. The comparable period in 2008 had seen the clearance of 2,828 proposals worth $16.4 billion.
• Although RBI did not offer any reason for the fall in investment volume, it is widely perceived that local companies are more cautious nowadays in their investment decisions and this has led to the fall. Following the global financial crisis, companies are shying away from investing in equities.
• New national transport permit regime
• To be effective from May 1, the salient features of this regime are:
• Replaces the existing permit regime which requires goods carriers to compulsorily pay Rs 20,000 annually per truck. Now they will have to pay Rs. 15,000 for plying their vehicles in the home state and three neighbouring states.
• For each additional state, the transporter has to pay Rs 5,000
• No relief for customers as permit fee contributes less than 2% of the total cost
• The total revenue contribution from state permits to goods carriers is estimated to be around Rs 932 crore annually

International

• SEC sues Goldman Sachs for subprime-linked fraud
• Goldman Sachs Group was sued by US regulators for fraud tied to collateralised debt obligations that contributed to the worst financial crisis since the Great Depression. The firm’s shares tumbled as much as 16% in early trade and financial stocks slumped.
• Goldman Sachs misstated and omitted key facts about a financial product tied to subprime mortgages as the US housing market was starting to falter, the Securities and Exchange Commission said in a statement on Friday. The SEC also sued Fabrice Tourre, a Goldman Sachs vice-president.
• Major Economies Forum (MEF)
• The MEF was set up by US President Barack Obama last year and it is focused on working towards seeking an outcome on contentious issues relating to climate change.
• Technology is one area that the MEF has sought to address. In this context, it is looking for a review of the renewables and efficiency deployment initiative (Climate Redi), which was launched at the Copenhagen conference.
• Letting Banks fail won't solve the problem
• This is an interesting article from Paul Krugman. Worth a read in entirety. But some excerpts:
• ...letting banks fail – as opposed to seizing and restructuring them – is a bad idea for the same reason that it’s a bad idea to stand aside while an urban office building burns. In both cases, the damage has a tendency to spread. In 1930, US officials stood aside as banks failed; the result was the Great Depression. In 2008, they stood aside as Lehman Brothers imploded; within days, credit markets had frozen and we were staring into the economic abyss. So, it’s crucial to avoid disorderly bank collapses, just as it’s crucial to avoid out-of-control urban fires. Since the 1930s, we’ve had a standard procedure for dealing with failing banks: The Federal Deposit Insurance has the right to seize a bank that’s on the brink, protecting its depositors while cleaning out the stockholders. In the crisis of 2008, however, it became clear that this procedure wasn’t up to dealing with complex modern financial institutions like Lehman or Citigroup.

Cinema

• Film and TV Institute of India FTII
• Established in 1960 by the Government of India after buying over the legendary Prabhat Studios, FTII soon became the most sought after training school in film-making and its various facets. Recently FTII turned 50. Its diploma courses in direction, cinematography, editing, sound, acting, art direction and screenplay writing can hold 174 students. The entry to this world of film academia takes place through both written exams as well as interviews.

Language Lessons

• Askance: Adjective
• (used especially of glances) directed to one side with or as if with doubt or suspicion or envy
• Adverb: With suspicion or disapproval; With a side or oblique glance
• eg: Even India has reason to look askance at Iceland, as it has brought the issue of suddenly-erupting dormant volcanoes to the fore.
• fib: Verb
• Tell a relatively insignificant lie
  
• eg: Fibbing is not acceptable, even if you don't call it lying.