Chala market: origins and evolution of the busiest market in Thiruvananthapuram

January 24, 2017

Just learnt about this historic Chala market in Thiruvananthapuram. Tripadvisor ranks it as 26 of the 114 things to visit in the city.

How the market was shaped by a visible hand – Raja Kesava Das – the dewan of the region:

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‘European culture’ is an invented tradition?

January 23, 2017

Benjamin Martin 0f Uppsala University in Sweden has a food for thought piece.

He says idea of European culture was invented sue to rising fears from US and USSR:

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A more effective way to learn about history of economic thought…

January 23, 2017

I came across this website: which is going to be used a lot by this blog in future.

It has this wonderful resource page on history of economic thought with this superb picture summing the core of most schools:


This is amazing!

As they say: A picture is worth thousand words and here it is worth much more than just thousand words.

These schools of thought are compared across different questions and issues. THese together should help develop comparative perspectives on these schools.

There are videos and lectures on the site as well. Do take a look..


Are there any banks on New York’s Bank Street?

January 23, 2017

Amy Farber of NY Fed’s Liberty Street blog has an interesting post.

She points how NY’s Bank Street does not have any banks. Infact, it is not even the street where banks were originally localted. It is a street where banks relocated due to yellow fever in NY:

Bank Street in New York City is a quaint little six-block stretch in Greenwich Village (see this 48-second video) with a huge cultural legacy—but no banks. Many cities and towns have a Bank Street and often the street is so named because that’s where most of the banks were originally located. (It is not likely that any Bank Street got its name because of its proximity to a riverbank.) However, New York City’s Bank Street is not where the banks were originally located and it’s not even in the financial district—it’s in Greenwich Village. Why, then, is it called “Bank Street?”

Okay, we cheated in that last paragraph. Manhattan’s banks were not on Bank Street originally but they were indeed there at some point—they moved northward from Wall Street in the late eighteenth and early nineteenth centuries in an effort to escape yellow fever. A post on the Forgotten New York website explains how there were two main waves of the epidemic in the city and that Bank Street was essentially named for the first bank to relocate, not the set of banks that eventually moved there:

Though most neighboring streets are named for local personalities in the Village’s early days (one early burgess, Charles Christopher Amos, had three streets named for him), Bank Street is named for one of the oldest institutions in NYC, the Bank of New York, which opened an office “uptown” after a yellow fever epidemic downtown on Wall Street in 1798 prompted a relocation. Several other banks followed suit in 1822 after a second outbreak.

One can view this relocation of banks as an early form of corporate contingency (or business continuity) planning. Think about how important continuity is in banking and how advantageous it would have been to keep those early New York banks functioning. In his 1922 book A Century of Banking in New York, 1822-1922, author Henry Lanier describes, in the chapter “The Year the Banks Migrated,” the Bank of New York’s forethought:

Some bankers and others had been more foresighted. As noted, one of the first deaths in the scourge of 1798 was a book-keeper in the Bank of New York. “Fearing another visitation of the pestilence, the bank made arrangements with the branch Bank of the United States to purchase two plots of eight city lots each, in Greenwich Village, far away from the city proper, to which they could remove in case of being placed in danger of quarantine. Here two houses were erected in the spring of 1799, and here the banks were removed in September of that year, giving their name, Bank Street, to the little village lane that had been nameless before. The last removal was made in 1822, when the yellow fever raged with unusual virulence, and the plot which had been purchased for $500 was sold in 1843 for $30,000.”

In this 1842 map of lower Manhattan, you can see Bank Street just to the right of the large “E” of the “Hudson River” label. (Here is a 1933 street view.) Of course, Wall Street is in the bottom tip of the island. Bank Street is about 2.7 miles north of Wall Street. Yes, it takes a bit of time to walk from one to the other—but not that long. 

There is further discussion on how such a small distance relocation helped banks.


Was US behind India’s demonetsation? Lessons from crisis when US bailed out the RBI in 1940s..

January 23, 2017

Srinath Raghavan has an interesting piece.

He says there are conspiracy theories on whether US was behind demonetisation? He picks lessons from 1940 silver crisis when US bailed out India. He says main thing is credibility of Govt and RBI which was an issue then and will be an issue today:

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Role of stamps in today’s world…

January 23, 2017

Santosh Desai reflects based on his recent visit to a post office after a long time:

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How Governments of Andhra and Telangana are fighting over property in Delhi!

January 20, 2017

Leave disputes within the region. The disputes between AP and Telangana are moving beyond borders to fight for assets and liabilities.

The fight is now for AP Bhavan in Delhi:

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UP Elections: It isn’t development versus caste, but development through caste.

January 20, 2017

An interesting story on UP elections via journey of two houses.

Both the mud houses got developed due to Lohia Housing Scheme started by the current SP Government:

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The history and importance of Section 7 (1) of RBI Act..

January 20, 2017

Some commentators have invoked Section 7 (1) of RBI Act to suggest the RBI Board had no choice but to go ahead with the 8 Nov 2016 move.

Section 7 (1) says:

[7. Management.

(1) The Central Government may from time to time give such directions to the Bank as it may, after consultation with the Governor of the Bank, consider necessary in the public interest.

Given one was trying to figure RBI Board History, I came across why this section came into being at the first place.

As argued earlier, RBI started as a shareholder bank with Board nomination coming from both Government and shareholders. However, while working towards RBI’s nationalisation the shareholder angle did not matter anymore. A Bill was prepared to amend RBI Act.

In the  bill, on one of the points RBI Governor suggested that in case of differences between the two, the government should take responsibility for their action. However, Finance Ministry refused this and added what is now seen as Section 7 (1). From RBI’s First History Volume:

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Evolution of RBI’s Board (1935 onwards)

January 20, 2017

Despite one wanting to withdraw from Currency Withdrawal exercise, it continues to ask questions and remains exciting.

The role of RBI Board in the exercise which was a mystery in the early part of the debate (not for the readers of this blog ) has become a major issue now. There are comments on both side of the debate. Some suggest the role of RBI Board shows how RBI has lost its autonomy and others who suggest this is not the case. Then there were concerns raised about FSLRC’s suggestion on reducing the RBI Board strength which has not been commented by anybody.

As there is so much chaos, it is best to get back to genesis. How did RBI Board evolve?

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Legislating Instability: Adam Smith, Free Banking, and the Financial Crisis of 1772

January 20, 2017

This is the title of a book by Prof Tyler Goodspeed. A brief of the book is here.

The failure of Ayr Bank in 1772 was a turning point in financial history. It led to change in thinking of Adma Smith who till then favored banking free of government regulation. Thus, this event continues to inspire financial historians who look for different viewpoints to explain the crisis.

Prof Hugh Rockoff reviews the book and sums up:

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The FinTech Bullshit Detector…

January 19, 2017

Chris Skinner wonders how so many Fintech companies are surviving?

He says given the large numbers already, next time someone tells you about this new finance technology just scream 🙂 He has prepared a list of things which help you detect FinTech Bullshit:

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Paytm founder displays hubris of the worst kind…

January 19, 2017

One thought this bit of news is a rumor till till one saw the video.

The founder of Paytm actually says this in Paytm’s Annual Day party:

In the video, he is shown as saying, “Jo hamare saath nahin hai wo royenge. Ek saal me wo kiya jo unhone 10 saal me nahin kiya. 2017 will be ours. Kaise nahin hoga? Kaleja diya, jaan di, khoon diya, saara kuchh laga diya. B********. Humne kuchh socha (repeats three times), aur saala doosron ki pant geeli nahin hui to kya socha. Ab koi India me hamari taraf nahin dekh raha, kyon? Hamare ko saara desh nahin, saari duniya dekh rahi hai.” (Those who are not with us would cry. We did it in one year what others could not do in 10 years. 2017 will be ours. How can it not be? We gave out lives, blood, our everything (for this). If we think of something (repeats three times), and it does not cause our competition to wet their pants, did we even think? It is not only India, but the entire world is now tracking Paytm.)
According to OfficeChai, in last year’s annual party, Mr Sharma had reportedly said that “no f***ing brand better than us”.
Really? When did things go so crass and vulgar with Indian CEOs? That too of one of the highest (sorry the highest) growing company in the country?
This is hubris at its worst and could just be the beginning of downfall of the company..

The imagery and themes of New Zealand’s new series of banknotes

January 19, 2017

It is not just about Sweden or Norway but those in New Zealand as well.

This Dec 2016 article by Matthew Wright in Reserve Bank of New Zealand Bulletin is a breezy read.

The Series 7 banknotes, introduced from late 2015, represented the first major re-design of New Zealand’s banknotes since the early 1990s. Although the selection of people, places, birds and other pictorial themes remained largely unchanged from the earlier Series 5 and 6 notes, the specific imagery was updated and full advantage taken of modern printing techniques to increase the reproduction fidelity. Some of the new security features, such as the ‘Spark Live’ bird image and the holographic window, are themselves of significant aesthetic appeal.

Indeed! Stunning pictures of banknotes can be seen here as well.

India’s central bank should take a cue. It should publish variety of research and not the usual boring type on inflation and growth..

Financiers of Victorian England would marvel at our nativity about markets and economics

January 19, 2017

An old post written in Oct 2016 but really fascinating.

Andrew Odlyzko, Professor of Mathematics (?!) and an interdisciplinary researcher writes about Victorian Finance:

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What is the point of having these Parliamentary briefings?

January 19, 2017

Lot of noise was made regarding this RBI Governor appearing before a Parliamentary committee yesterday (another one tomorrow). It was called as grilling and what not. But in the end it just turned out to be a damp squib as RBI just refused to answer most of the questions.

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What I learned from Warren Buffett and Charlie Munger?

January 19, 2017

Shane Parrish tries to answer the question.

We make a big deal of skills of investors and financiers but deep down it boils down to basic human qualities.

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Reserve Bank Information Technology Pvt Ltd — The biggest and most important RBI division in future?

January 19, 2017

One just came across this recruitment page on Indian central bank website. It advertises for opening in one of its subsidiaries called Reserve Bank Information Technology Private Limited or REBIT (website of REBIT here):

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A dynamic world map showing emigration to the United States from different countries since 1820

January 18, 2017

Superb pointer from Utopia Blog:

Local Currency is Like a Car That Can’t Leave Town

January 18, 2017

Superb article by Prof George Selgin.

He comes from the free banking school which advocates banks issuing their own currency and managing their affairs with no central banks in picture. In such a case, one would imagine him advocating local currencies. But it is not the case as local currency does not help much if it does not enable trading beyond the local area:

Though the shortcomings of local currency are serious ones, they are far from being inherent shortcomings of all substitutes for official (national) currencies. On the contrary: far from being inherent, the shortcomings of local currencies are ones which have been purposely built into those currencies by persons seeking to make them serve an end quite at odds with that of making it as easy as possible for people to exploit potential gains from exchange.

There is, in fact, nothing to prevent other kinds of unofficial currency from commanding a national market. The key to having them do so is that, like modern bank deposits, they must be fully compatible with the existing monetary standard, and readily useful throughout the national economy, if not beyond it.

Historically, private banknotes have possessed these qualities wherever legal restrictions haven’t prevented banks from establishing branch networks or taking other measures to make their notes current beyond the banks’ headquarters; and it is conceivable that other forms of private currency, including privately-issued token coins, could also take the place of government-supplied alternatives, if only the government would let them.

So, while I applaud the effort of local currency proponents to break the Federal Reserve’s currency monopoly, I regret that they’ve chosen to sabotage this merit-worthy mission by linking it to the much less worthy one of keeping people from trading with “outsiders.”

As the ever-sensible Bastiat once observed, “The worst fate that can befall a good cause is not to be skillfully attacked, but to be ineptly defended.”


The Bastiat quote is quite apt to for the ongoing currency situation in Indian economy as well..