Category: Economy

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Economy thoughts

Obama’s Strategic Move.


President Obama makes up his mind to appoint Bernanke as Fed Chairman,five months ahead .Economists feel  that he is the right choice.He faltered at the early stages, but learnt a lot by mistakes.He made a mess of the foreclosure crisis.Obama said  that his temperament, courage and creativity helped to prevent another Great Depression.

Bernanke fumbled  under pressure in not finding a way out to take over Lehman Brothers.He has revolutionary ideas.He has cut rates and opened a discount window to more firms.Economy is showing recovery, but still unemployment is looming large.He has to pay  a serious consideration in putting things together.

His performance has won him a grade of D+ -69  as calculated by the economists .He was awarded  low marks below 20.His median grade is 80.But , if he could pull back the economy to reasonable status , then he will go down in  history as one of the greatest fed Chairman.He has to deliberate on the vast expansion of the balance sheets, and  has to screw up the money supply. He has to tread a careful path.

Stock futures  pointed to a moderately high opening.Bernanke, if chosen, vows to restore”more stable financial and economic environment in which opportunity can again flourish and in which Americans hard work and creativity can receive proper awards.”

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In A Quandary.


“To be or not to be”was Hamlet’s dilemma. The Hameletian philosophy is traced down the line in the Fed’s decision to lower rates. Rates almost nearer to zero will stop inflation from falling and falling says Kohn, on behalf of the policy makers. The Federation chopped the rate to zero, pumped hundreds of billions of dollars to keep the economy positive.Did they find success?

Carl Wash, a Santa Cruz economist ,of the university of California differs.His research points out that low rates would definitely clash with inflation against which the Fed is fighting. Kohn does not admit to this economist’s view.

The Fed’s buy of long term securities will spur growth, is another illustrative policy of Kohn. The economists ,again feel dithered , indicating that procuring these assets  while rates are falling is highly risky. Kohn’s perception is contrary to the acclimed economists outlook. He believes that investors desire to raise short term securities. The central bank ,has a valid scope to step into the arena, thus affecting the value of the assets.

The European counterparts do not want to lower the rates . They have a target , and the process of moving ahead to reach the goal is getting on without much disruptions. They are determined not to cut rates further than 1%.

Kohn traverses a path less travelled, His government’s policy ,at the moment is not applicable.,in the real sense. It poses a real risk . How does Kohn proposes to annul inflation by bringing down the rates low.?His  scheme appears mystical, beyond comprehension and totally out of context. 

The Fed ,in Robert Frost’s words has

Miles to go before it sleeps

Miles to go before it revives, is the slight modification ,I contribute to the whimsical equation of Kohn.

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Recovery With A Scar


Recession is almost over. Bad times have been expunged.We see a kind of happiness all  around. We hear a sigh of relief, which is sonorous. We  experience a sense of practicality ,which is rewarding. The throbbing fear, the serious deliberations, the much debated flaws in the economic policies, the nervous apprehension all have slowly dimmed though not a full detachment from the prowling irregularities that pounced the world economy.The attack was so harsh that it surmounted to a depletion of finances.

U.S was bleeding. The housing proved a devilish blow, banks  miserably collapsed, one after another, autos applied a sudden break. There was a veiled drooping ,a cacophony shriek,a hoarse muttering which made the richest nation a skeleton like virtuoso. U.S succumbed to the wrong policies. It fell a prey to the erring shots of the bureaucrats. Its people knew to spend, but did not learn to save.The two year abject decimation of its financial, has restructured the tarnished economy.U.S is slightly propping its head out, and Paul Kruggman opines that by September, the country would emerge timidly out of  depression, but the scar will remain.

A serious wound takes time to heal, once it starts closing up, the getting better sets in. But the deep wound will leave a scar ,which will take months or even years to vanish. Similarly the bruise that economy has inflicted on the nations, is methodically getting covered up,but the residue will last long. It should remain for a duration, so that any folly or mishap for that matter will be  deflected once we are reminded of the great recession.

Recessions and Depressions punctuated this long era with their shortcomings. The default should have taught us a lesson , should have made us refrain from not committing the same folly. It did teach , but we like every other eventuality forgot . We indulge in going through the doldrum once again.

A thorough grounding of theorems and hypothesis in school days ,escapes our memory . A  strong fundamentals in grammar and applications of skills in writing during our  school and then college levels are no longer sustained in our mind. We go about our own way,discarding the accepted norma.  rejecting the bequeathed traditions, deferring the established principles. So ,if another pulsating ,subduing ,denigration bursts out, we have no alternative but to be drawn by it unobtrusively, and later climb out fully drenched in its velocity and vibrancy.

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Monsoon Blues Slows India’s Pace.


Six nations are out of recession. India and China escaped unscathed,while Japan and Germany have made up at last. Brazil has jumped out of the pull down all in a hurry. France has made a smart  turn around.

The Indian scenario of progress was quite impressive , healthy and time bound.The election mandate has given a stable government. The GDP growth was reasonable.The monsoon was expected to set in mid June, it took its own time to settle. Settled did it, with weak strains, and little rain. The States which depended on the onset , were greatly disappointed. Agriculture had a pristine glow during this period, but the peasants are depressed of the failure. Less or no rain indicates a full stop to implemetation of ploughing, sowing, and harvesting. The poor farmer, a good rain, has borrowed money to carry on the prelimiary operations. But woe befell, and we hear 72 suicidal deaths in Andhra pradesh alone. The situation looks grim. The Prime Minister is worried.He has to see to plight of the farmers and the drought hit areas. States affected by deficit are demanding higher  aids to cope up with the situation.

Nature has slowly detached itself from Indian  growth ,which is upbeat. The Indian stoicism ,will not allow any digression to affect its progress. The indomitable, invincible spirit Of the Indian will take him to great , as its Prime Minister announced ,that a growth rate of 9% is setas a target, and by any means it will be achieved. India will  exactly cross over the mark ,as it is a store house of potentiality.It is the think tank of the world. The quick witted Indian, the shrewd Indian, the hard working Indian, and above all the coveted concept that of extraordinary brilliance the Indian is sure to make his mother land strong in economy,

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Oil Palm Cess Plus Tax on Income.


The Malaysian Palm Oil Board levied a cess on oil palm plantations, irrespective of their size, small , medium, or big. The estate owners had to subscribe to the terms of the government. The administration levied RM 2 on every increase of 100 Rm fro CPO.In 2007 and 2008, the prices stretched high. The cess was duly paid. Subsequently the price of fertiliser rose three fold. As a natural sequence , labour also expected a hike. So everything ended up high.The plantation holder, had to pay cess, had to  pay higher for manure. and his work force had to be satisfied. Finally , he had to pay tax on his income. Thus he is doubly taxed by the government. No rebate was announced by MPOB.

In 2009, the prices sank low. They ranged between 270RM _290Rm. The cess was not enforced. But the other expenses did not come down with the down trend in price. Fertiliser remained as high as possible. No labourer would accept to decrease  his wages ,as the price has fallen. The plantation holder has to face the brunt. The government keeps tight lipped.

This month ,that is in August the prices are looking up. But there is insufficient rains. The seven months had the  estate owners in tight grip. It was more or less a hand to mouth existence. They had to tend their palms. give them proper nourishment and harvest the fruits in spite of increased expenses. Any negligence will have a telling effect, as the fruits will dwindle when not taken proper care.

The Malaysian government must take an initiative by giving certain tax concession to the owners while computing their income. It should also give an incentive to the estate owners when the price drop. Oil Palm is the vital source of revenue to the government.Any impetus and encouragement by way of tax rebate to the owners for the years 2007 and 2008 will be welcomed and bring cheer  amongst them. Anticipating  a discount in tax , as the estate owners experienced double taxation during the period.

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Around The World In Eighty Days


Obama has completed two hundred days in office. A spectacular achievement ,which needs to be applauded. Achievement , in the sense, he has been successful in bringing out a renaissance in the economy, a new look in the health care, a centralised attention on education ,and a pinpointed focus on unemployment. He may have slipped on one or two occasions, but the overall performance is brilliant. His external affairs got an impetus , by his swift move around the world.He has visited so far, 14 countries. wherever he landed, his gift of the gab won the hearts of the people. His diligent approach brought him a roaring applause  from the diplomats ensemble.

The murmur ,the tax payer’s money is utilised for such worldwide sojourns, is heard very feebly. But ,to run  the administration of the United States Of America,a generous outfit has to be set aside . His oration in Saudi, followed by his speech in Egypt  ,were an effective  tool to win the rapport of the Muslims.The virtual animosity and hostility nurtured in the minds of the Muslim youth against the U.S, got dissipated by the friendly warm talk of Obama.  

Back home, his fiery inclination to provide jobs was well received by the senate. There arose a question as how he is going to fund for the new employment when the economy is facing a down turn?He , with his staunch aides developed a programme  in the areas of laying roads, building hospitals, and schools. Infrastructure needs to be developed , to make the nation volatile and move in the right format. Health  ,was another factor that called his attention. He has done a wonderful job, by providing utmost care and world class facilities to patients both in and out.

 

The economy is making a  steady right about turn.AIG has made a neat profit in this quarter after the 2007 slump.A great mark that needs to be taken note off. 71 banks ,have been closed down by the regulators. It is a pretty dull dissuading  trend in the reviving scenario.But the shoe, when it starts pinching your toes , should be discarded.Never try to cut your toes to fit your shoes. Similarly the banks appear to be provoking thorns in the bush .They have to be eliminated , to transform the economy into a robust ,healthy one.

Obama needs all praise for his daring endeavour. His indulgence is comparitively riskier than the launching of a satellite. He has succeded so far. It is the initila days that pose a threat, but once you get acquainted with the nuances of the administration , and understand the machinery of governance, you can surely win accolades.

All the best Obama!

 

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India -First to be Out Of Recession


An evidence that is circulated all over the world is that India is out of recession. China ,is also creeping out of the shadow. It is a true statement. Yes , India is marching ahead to progress, leaving behind other affluent nations. One must remember, that Indians are made of different material , This particular stuff holds the Indian equanimity in tough fists.India had been repeatedly attacked by the foreign invasions. Be it Mughuls, Portuguese, Dutch ,and finally colonised by the British, the Indian mentality remained undeterred . The invincible spirit makes the Indian go ahead, in spite of the destruction he meets. The Mughuls looted the riches of the land. The Portuguese and Dutch ,in a milder form amassed wealth by capturing land and indulging in trade. The British entered as shopkeepers,uncannily became the masters of the land, depleting the beautiful country of its resources, of its plentitude,and its exorbitant wealth. They introduced an educational system, which is still in vogue, making the citizens into clerks rather than rulers. The obeisance instilled by the English has humiliated the Indian ego. After 60 years of independence , the servitude still holds the population in grip.

All these broaches , disruptions and discomforts did not leave the average Indian disillusioned and crestfallen. He rose from the cinders , worked up against all oddities, involved in trade ,started industries, educated himself, holding a concentrated tenor in his language proficiency. He mastered the English language. There are few English writers who have surmounted the Indianwriters in writing skills. Most of the educated Indians excel in the usage of the language, much better than the Natives.It is this articulate tact of the Indian that is placing him high over all 

The Indians were put on board by the British to Burma, Ceylon, Singapore, Malaysia, Indochina, and South Africa, to work on plantations, as these countries had a shortage of labour. The Indian labour toiled hard , braving natural calamities, putting up with unfavourable conditions, unmindful of hours of work,for the progress of the nations into which they were deposited as mere human animals. Once the Britishers left, these workforce had to endure disdain and scorn from the new rulers. Yet they sustain with the stoic spirit that is holding them together

It is this stoicism that has released India quickly from the worldwide recession. Other nations ,used to comfort and cheer, find it a task to outgrow this proposition. To the affluent the recession seems to be in gigantic proportion. Recession has hit them like a lightening.They are blindfolded. It has struck them like a thunder. They have been deafened by its sound. It has churned them as a Tsunami. They have been ripped apart.To realise the positive goal ,they are  struggling. But to the Indian, it is another episode. He has taken it i the stride . He is moving ahead.

Indian, I salute You.

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Business To Progress


Prosperity of a nation depends on business.Metaphorically there maybe a different opinion.But , pragmatically speaking the financial flourish is the nerve centre of any country. To make things take the right direction, the government has to both give a long rope ,and a stiff regulation . This may sound ridiculous , impractical, and below the mark. Discerning forthright we can extend our plausibility ,by persuading the business oriented to enter into straight forward deals ,unmindful of the heavy cash involvement.The back up can be provided by the financial institutions with a minor charge over the asset of the company. This modus indicates freehand but with the patrol behind. This operandi will safe guard the interest of the Banks The transactions  will effortlessly push along earning a large proportion of revenue. Thus the trading  significance attains extra meaning and sensibility.

The Policing attitude of the government body should be gentle and genial. A harsh, impolite,rude monitoring will spoilthe show. Countries which seem to have taken to this culture are in the upswing. But Nations ,which huddle to the spoilsport temperment  are lagging behind in their achievements.A free hand to a child will raise her to glory.A kindly spirit and an encouraging talk will land us to the  region of success. A steadfast spirit, come what may should be the motto of the businessmen. Take ups and downs with equanimity. Face life with cheer and determination . Then success will fall in your lap.

A graceful movement will make us happy. A loving word will  soothen our spirit. A caring approach will heighten our active participation. This is what  a true businessman expects from his State.

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Ambanis Claim Nature


Ambanis govern the Indian nation’s economy.Ambanis consider the national ,natural asset as their own. Mukesh and Anil fight over it. Is it not amusing?Does it not sound quixotic?The whole issue is malignantly ridiculous.It signifies a voluptuous appetite.

The Indian Government is screaming over the feud of the brothers. It has addressed the dispute as the economy is eld hostage by the Ambanis. It has rushed to the Supreme Court,to disprove the claims of the brothers.What a sad state of affairs!. This is a typical way of conducting business in India.Ambanis fit the business jigsaw exactly.

The Indian trade and commerce professed certain morals ,practised ethics , before the fanfare appearence of Dhirubai Ambani, the father of the fighting brothers.

Indian business and finance can be classified into two main epochs. The era before Dhirubhai can be termed as B.A. and after as A.A.The B.A was a modest age, where there was a few businessman-top level, and few business, focusing on textiles , Steel , cement. Public listed companies were less. The shareholders had absolute faith in the management and the later reciprocated the trust with bonus shares and handsome dividends. Industry was thriving , in a compressed structure as there were regulations to monitor the growth. There were minimum defaulters. The GDP was growing steadily.

In 1970 , the messiah of business Ambani hustled in with a magic wand. He floated  his companies with much  exhibitioners skill. His shareholders were treated with a silver spoon. The new era in Indian business dawned. It brought with it excellent results,  showed high speed in development,negotiated the loopholes in the strict regulations.It also derived an hideous suffix of anti in all its vibrations. It assumed a proportion which was opposite to every confirmed attribute. Anti legal, anti tax, anti government and anti trade,became the motivational spirit of a business man.The voice of the protesters to these attempts was silenced by currency or by inflicting physical bruises. Admonitions were quietened by these dons. The Government top gear was in the hands of these industrialists. A silent devastating revolution was underway.So long the Government was held captive by these big shots.

A sudden enlightenment is in the vicinity. The Government has slammed the Ambani brothers of holding economy as hostage, reads the news clippings.

The Ambanis are trying to usurp Nature of its bounties. They are not aware of nature’s violence , of its fury. Its toll is beyond comprehnsion

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Building Planes In The Air-Not Castles


The Indian sky ,which has a traffic jam , is going to be freed by the restrictions that are going to be imposed by the Oil companies on few airlines. There was  a sprout of aviation companies recently. They were having fast take offs. They grew in supersonic ” Jet” acceleration. They  took to the sky imperiously as”Kings’ ascend the throne.They were ‘Paramount ” in fame. They added “Spice” to travel.The “National Aviation’ is a big question mark.

Murali Deora , the Indian Minister for petroleum ,has come out with the details of the overdue payments by Kingfisher , leading the list with  960 crores ,followed by Jet  with750 crores,National Aviation company 472, Paramount -25.32 crores, and Spice jet -16 crores.,to three petroleum companies.If the airlines do not hasten up their repayments, then action will be taken according to the commercial agreement that was signed by the Petroleum companies and  airlines.

The datas seemed to be alarming. While the airlines are having such a neck to neck situation, how do they keep things running , not only smoothly, but making public announcements that they are going to purchase planes . They are going to enlarge the destination maps.

The financial reporter has a duty to weigh the data’s before he puts it in black and white. the reporter Of Business line a fortnight back , had come out with the purchase of ten planes by paramount Airways. the managing Director ,of the airlines, had announced that he is making waves , by introducing Business class  flights. Now ,he is getting into the arena of bringing more cities into his regime. The report was so exciting. But the Petroleum Minijster’s proposition of taking action against Paramount Airways is disarming.

King fisher Mallaya is a dare devil. He appears in the scene like an apparition and disappears in a hallucination. His King fisher airlines in sparkling red ,look so cutte. The service  is excellent. As if in a stroke, he bought the low cost airlines Air Deccan. His admiring courtship has virtually slipped to back levels when we hear about his loans. His airlines is in red.

The Jet Airways, which  revolutionised Indian air traffic,is rejected by its impressive debts.Naresh Goyal, the mentor of Jet airways , was in news when he tried to conclude Jet -Air Sahara deal.But , the deal dropped dead . Later he sacked  a fine percentage of his employees, one fine evening.When faced with stiff opposition, he shed crocodile tears , and called the dismissed  work force back. Now , he is in the limelight as a defaulter.

Business , whether it be a petty shop, or a conglomerate should propound ethics, should have a solid base, and strong fundamentals.. It is easy to build castles in the air, but not planes. Castles depict imagination,according to the saying,but planes carry flesh and blood,ambition and aspiration, love and affection. So , a better strata of reality should land before each take off.

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