As I promised this blog is just not going to be about pilitics and economics alone,infact I am gong to write here whatever comes to my mind.(I am sorry if any reader is disappointed by my not sticking to a particular topic ,but then this is the beauty of "The Other Way")
Anyways lets get to the point..Dows breaking again after yesterdays of about 270 points and is running back to 1997 lows as I write this blog.Obama has clearly appointed the markets with not making any concrete announcements.Indecision is worse than decison and markets who better to teach you that the markets.To me if Dow doesnt manage to pull back today,it is nothing more than the tape shouting to short the NIFTY.Indian markets have stood firm till now but when everythings falling it would be difficult for markets to hold the head high.
The evaluations look fantastic at this time,with many companies being undervalued..this might be the right time to enter the markets if you have a longer term prespective atleast 2 years ,but then the job of a speculator is different than that of an investor,who is concerned mainly with ensuring a constant return on his monies while a speculator want to earn quicker profit by following the trends of the market.So far this is concerned ,NIFTY is looking very weak if it breaks the 2600 level.Therfore if NIFTy breaks 2600 we might see the last downside of this bear run...the last exaggeration which is so characterstics of bulls and bear cycles.Yes markets exaggerate,but for a speculator no price is too high to buy and no low too sell
At the same time if NIFTY returns back from these levels and breaks 2800 tomm. I would take it as a confirmation of bottoming out of the market.At the macro economic level,the interest rates seem to be softening and a good agricultural output might be able to stimulate demand but for rest nothing is too positive.Bewre the bottoming out of market does not indicate that the bull run has started.For there would be large consolidation phase when markets would remain range bound and only when macro ecomo,ic fundamentals improve and their is "money" to be diverted in the markets that a bull phase would actually start.Meanwhile either play in range or stay outside..Happy trading
Wednesday, February 25, 2009
Sunday, February 22, 2009
Shoba De and Economics
This Sunday morning as I picked up my copy of TOI ..after a cursory glance at the front and business pages(like hinid news channels their are only select newspapers which produce journalism worth mentioning today)and then turned to my faviourite page..the editorial.For all its flaws I admired TOI for its edits with some of best and most respected Indian personalities writing in it.And guess what TOI disappointed me even on this front..for what I saw on the page was nothing more than a hilarious joke on the intelligence of TOI readers...Shoba De,the self proclaimed socialite and author,whose works include nothing more than sex and relationships had decided to give "gyan" to Indian junta on interim budget and current economic crisis.
After muttering some thoughts ,I proceeded to read the article..and guess what Ms De didnt disappoint me.What followed was a foolish writeup on interim budget with sexist statements and double meanings to entertain the reader.
Consider "and Mr Mukherjee failed to pull it up .......and tried to show he can do it again.."
I think if TOI needed someone to comment on interim budget ,it shouldnt have been facing such a crisis call that it had to resort to Ms De.
Anyways I am not against her style of writing but the opinions,the are naive and foolish.She talks about money not doled out in budget,how can it be ,in a democratic setup it would be foolish to tie the new government with policies of old.For it would be difficult and expensive for any new government to take away the tax sops or do a U turn in public policy and if it doesnt that might just be against a public mandate..and to top it up all foreign investors fear any U turns in policy..such actions just push down the markets (remember how markets reacted when UPA -Left combine were to assume power in 2004..fearing a U turns in reforms initiated by NDA regime).Infact Ms De I think that UPA had done a brilliant job by fine balancing the fiscal need s of the country and at the same time mantaining the status quo and respecting our democratic iderals
So next time TOI needs a budgetry write up..it might invite Mr Bachan or Mr Rushdie..after all TOI readers are naive and foolish ready to be led up ...atleast this is how TOI feels
After muttering some thoughts ,I proceeded to read the article..and guess what Ms De didnt disappoint me.What followed was a foolish writeup on interim budget with sexist statements and double meanings to entertain the reader.
Consider "and Mr Mukherjee failed to pull it up .......and tried to show he can do it again.."
I think if TOI needed someone to comment on interim budget ,it shouldnt have been facing such a crisis call that it had to resort to Ms De.
Anyways I am not against her style of writing but the opinions,the are naive and foolish.She talks about money not doled out in budget,how can it be ,in a democratic setup it would be foolish to tie the new government with policies of old.For it would be difficult and expensive for any new government to take away the tax sops or do a U turn in public policy and if it doesnt that might just be against a public mandate..and to top it up all foreign investors fear any U turns in policy..such actions just push down the markets (remember how markets reacted when UPA -Left combine were to assume power in 2004..fearing a U turns in reforms initiated by NDA regime).Infact Ms De I think that UPA had done a brilliant job by fine balancing the fiscal need s of the country and at the same time mantaining the status quo and respecting our democratic iderals
So next time TOI needs a budgetry write up..it might invite Mr Bachan or Mr Rushdie..after all TOI readers are naive and foolish ready to be led up ...atleast this is how TOI feels
"the other way"
All right so I have finally made a blog and forced many of my friends to read it (yeah no body has read it till date of his own free will).I have got some terrible feedback and probably I wont like to write it over here...for I dont want to scare the pretty souls who have come here with "great expectations".Anyways one question thats constantly being asked is why "the other way"
Well to be honest I am not a person who likes to move with the flow,I have my own reasons and take a stand based on what my reasons say and not what the popular stand is.So u might just find me advocating reservation (ofcourse after I am done with all my admission process..:) )or saying socialism is better than free markets (if that statement moves the markets down and I am well short of it )and blah blah blah....Anyways jokes apart,whenever I tried writing for so called neutral magazines and newspapers my articles and letters were trimmed down ,content sacrificed at the altar of editorial predjudice.,...so here i present to the world my mouthpiece which is completely uncensored and highly predjudiced...i would try to use this forum to speak my heart out and show to the world the other side of coin (nay coins) ,try to force you to think (if you are not foolish like me) beyond the conventional....and so i present to you "the other way" a blog with a lot of contrarian calls (fools join me,intelligent shun me)....so happy blogging..happy reading
Well to be honest I am not a person who likes to move with the flow,I have my own reasons and take a stand based on what my reasons say and not what the popular stand is.So u might just find me advocating reservation (ofcourse after I am done with all my admission process..:) )or saying socialism is better than free markets (if that statement moves the markets down and I am well short of it )and blah blah blah....Anyways jokes apart,whenever I tried writing for so called neutral magazines and newspapers my articles and letters were trimmed down ,content sacrificed at the altar of editorial predjudice.,...so here i present to the world my mouthpiece which is completely uncensored and highly predjudiced...i would try to use this forum to speak my heart out and show to the world the other side of coin (nay coins) ,try to force you to think (if you are not foolish like me) beyond the conventional....and so i present to you "the other way" a blog with a lot of contrarian calls (fools join me,intelligent shun me)....so happy blogging..happy reading
Saturday, February 21, 2009
The Farce called MNC's
"BIG IS BETTER" thats what they used to say..nay they still say.Ever since we stopped believing in Gandhian principles of small scale industeries as a tool of poverty alleviation,we as a nation have been trying to furiously be a nation of MNC's..the american way.We have tried it all..provided trade protectionalism and become a model of inefficiency for the world.Then we went for the so called reforms(were they?)in 1990's but India still continues to grapple with the same problems of low rates of poverty alleviation and continues to be a nation of have and havenot's
The current financial turmoil provides an oppurtunity in darkness to take remedial steps that would have been considered franatical and sucidal to say the least just a few months ago.For the first time we can ask ourselves that at this crossroad should we as a nation continue to promote the MNC culture insted of investing in small scale industeries and agriculture which are considered a much better way of employment generation and wealth distribution.
Some economists argue that big industeries help the growth of the nation by providing a means of using distributed wealth over the mass of population and creating employment,infrastructure and standards of efficiency unthinkable otherwise.
While the above might be true to some extent but overtime the advantages of the so called big corporations become their biggest drawbacks.Consider efficeincy for example..i can remember talking with my manager at TATA MOTORS how the process of buying a simple lathe machine costs the company about twice of any small scale company..u had to go through set channels..so called systems and then inevitably their is payout to company officials (yes corruption is not limited to governments alone and not to Indian companies alone...this is the hard truth).If big corporations were so efficient why would "outsourcing" have become the buzzword today??
Yes I know what all of you would be thinking till now..if their would be no MNC's who could take all those big infrastructure projects and what about all the R&D these companies do.Well, let me spill you a secret,if we had no MNC's we wouldnt have required all that infrastructure.Its like the proverbial viscious circle whose solutions are the problems.Consider for example the massive money put in by private corporatoins in retail and reality sectors.If we had a good enough agriculture and small scale industrial set-up there wouldnt have been the problem of massive urbanisation and assosciated enviornmental damage that is plaguing our world today.Insted we would have an equi-developmental model implemented with relatively little difference between urban and rural incomes..something all counteries are trying to develop...and the benefits...social stabilty,lower crime and increased development..can our MNC culture beat that??
Another point of ten raised in favour of big corporations is that MNC's help in channelising money towards R&D efforts and they help in utilizing the natural efficiencies of a country (outsourcing in India?or manufacturing in China?>)to maximum extent possible.Nothing could be further from truth...the biggest inventions of our times have been the result of direct or indirect government programs.The internet was invented at CERN,a research program funded by European nations,the atomic power was discovered by US government sponsored programs,the latesttechnologies GPS,supercomputing have all been developed at government funded research institutes or universities across the world.Infact the MNC's have been only been successful in goppling up the massive research subsidies doled out by governments and exploiting the developed technologies..which in the long rin has only led to environmental and social destruction (remember children working at NIKE factories in China or Coke selling pesticide laced soft drinks in India or companies selling GM seeds eventually trying to control food chain)
No, i am not a jehadi,advocating dissolution of all these MNC's rather I am just asking to relook our equations in a bid to ensure that these giants do not become so large that they sink in the whole financial ,social and economic system with them just like a black hole sinks under its own weight.Infact if we were to do some detailed analysi the graph of corporation size and social growth would be in the shape of an inverted parabola with the peak at about medium sized industeries.
So what do we do now..first of all trim all the big companies so that any future faliure of one organisation wont lead to faliure of the whole system.Second develop a model which encourages youth to embark on enterprenural ventures rather than seeking fat pay packages.Statistically this could lead to increased job creation and wealth distribution,something for which the state exists.Third the government needs to spend heavily on research and have a better patent regime to support these industeries..
Ah ll this and we may just hope that another economic depressoin wont happen..atleast in our lifetiem
The current financial turmoil provides an oppurtunity in darkness to take remedial steps that would have been considered franatical and sucidal to say the least just a few months ago.For the first time we can ask ourselves that at this crossroad should we as a nation continue to promote the MNC culture insted of investing in small scale industeries and agriculture which are considered a much better way of employment generation and wealth distribution.
Some economists argue that big industeries help the growth of the nation by providing a means of using distributed wealth over the mass of population and creating employment,infrastructure and standards of efficiency unthinkable otherwise.
While the above might be true to some extent but overtime the advantages of the so called big corporations become their biggest drawbacks.Consider efficeincy for example..i can remember talking with my manager at TATA MOTORS how the process of buying a simple lathe machine costs the company about twice of any small scale company..u had to go through set channels..so called systems and then inevitably their is payout to company officials (yes corruption is not limited to governments alone and not to Indian companies alone...this is the hard truth).If big corporations were so efficient why would "outsourcing" have become the buzzword today??
Yes I know what all of you would be thinking till now..if their would be no MNC's who could take all those big infrastructure projects and what about all the R&D these companies do.Well, let me spill you a secret,if we had no MNC's we wouldnt have required all that infrastructure.Its like the proverbial viscious circle whose solutions are the problems.Consider for example the massive money put in by private corporatoins in retail and reality sectors.If we had a good enough agriculture and small scale industrial set-up there wouldnt have been the problem of massive urbanisation and assosciated enviornmental damage that is plaguing our world today.Insted we would have an equi-developmental model implemented with relatively little difference between urban and rural incomes..something all counteries are trying to develop...and the benefits...social stabilty,lower crime and increased development..can our MNC culture beat that??
Another point of ten raised in favour of big corporations is that MNC's help in channelising money towards R&D efforts and they help in utilizing the natural efficiencies of a country (outsourcing in India?or manufacturing in China?>)to maximum extent possible.Nothing could be further from truth...the biggest inventions of our times have been the result of direct or indirect government programs.The internet was invented at CERN,a research program funded by European nations,the atomic power was discovered by US government sponsored programs,the latesttechnologies GPS,supercomputing have all been developed at government funded research institutes or universities across the world.Infact the MNC's have been only been successful in goppling up the massive research subsidies doled out by governments and exploiting the developed technologies..which in the long rin has only led to environmental and social destruction (remember children working at NIKE factories in China or Coke selling pesticide laced soft drinks in India or companies selling GM seeds eventually trying to control food chain)
No, i am not a jehadi,advocating dissolution of all these MNC's rather I am just asking to relook our equations in a bid to ensure that these giants do not become so large that they sink in the whole financial ,social and economic system with them just like a black hole sinks under its own weight.Infact if we were to do some detailed analysi the graph of corporation size and social growth would be in the shape of an inverted parabola with the peak at about medium sized industeries.
So what do we do now..first of all trim all the big companies so that any future faliure of one organisation wont lead to faliure of the whole system.Second develop a model which encourages youth to embark on enterprenural ventures rather than seeking fat pay packages.Statistically this could lead to increased job creation and wealth distribution,something for which the state exists.Third the government needs to spend heavily on research and have a better patent regime to support these industeries..
Ah ll this and we may just hope that another economic depressoin wont happen..atleast in our lifetiem
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