Archive for February, 2016

Surge of Amma brand in Tamil Nadu (and clone could emerge elsewhere)

February 29, 2016

T E Narasimhan has this interesting piece on the Amma brand based on TN Chief Minister Jayalalitha.

It is all ironical really. One would imagine private sector to dominate private sector in Indian economy and a new private player to challenge the incumbents. But the challenges  are coming from babas and politicians. It perhaps goes back to our historical roots where we always believed gods and kings more than anything else:

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How to ensure incumbents are not reelected so easily…

February 29, 2016

Interesting bit of advice from Hans Gersbach. Something India’s election commission should look at:

 ….
The core idea pursued here is to tie the vote-share for re-election to the one obtained in election and to compare the candidate’s re-electoral performance with his own previous electoral result. If we extend this rule to more than one re-election, it would work as follows: instead of simply having to gain more votes than his challenger, an incumbent’s vote-share in re-election should never fall below his previous electoral performance. Such a rule would preserve those effects of the incumbency advantages that are beneficial to society4 and mitigate the office-holders’ incentives to reduce his efforts. In short, I suggest tying re-election to the incumbent’s electoral history.
Discusses both merits and demerits of the idea..

UAE establishes a Ministry of Happiness, Tolerance, and Youth..

February 29, 2016

Mohammed bin Rashid Al Maktoum (Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai) has this piece in Project Syndicate. UAE recently formed such a Ministry and he explains reasons for the same.

This is easily one of the best articles and one of the most interesting developments in recent times. It is also such a surprise to see the rule of Dubai write such a piece. When the world leadership barely struggles to speak properly, it is amazing to see King of Dubai of all leaders writing a piece on governance:

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The Bible on should we profit from our relatives/strangers?

February 26, 2016

Sarah Skwire has this interesting discussion on the topic.

After all whom to lend and not to lend and on what terms is critical to evolution of banking.

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Municipalities and neighborhoods establish local currencies to invigorate their communities..

February 26, 2016

Marina Primorac of IMF has this nice piece on local currencies:

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Economic strategies of various candidates standing for US Presidential elections..

February 26, 2016

Michael Boskin of Stanford Univ sums up the different economic strategies:

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Prof. Anatoly Liberman’s quest for the history of lost words…

February 26, 2016

This is a superb profile of Prof Anatoly Liberman (of Univ of Minnesota) who is trying to figure out the origins of common words

Anatoly Liberman is a tall man with a slight stoop and an accent that is hard to place. The stoop comes from decades spent searching for the hidden history of words in one of the fifteen languages he can read. It may also be from the weight bearing down on his shoulders as he races the clock. At the age of seventy-nine he is trying to finish one of the greatest achievements in the annals of lexicography: a history, as complete as possible, of some the last words in the English language whose origins remain unknown.

They are simple words, common words, but words whose origins are a mystery: he, she,girl, pimp, ever, gawk, yet. We use these words every day, but Liberman has been working for thirty years to unearth their roots. His sharp mind, breadth of language, and sense of mission have kept him moving steadily toward that goal for the last half of his life. He is driven by the knowledge that if he were gone, no one would have the depth of linguistic knowledge, let alone the drive, to complete his work.

One is short of words  to see the effort and joy of discovery Prof gets while discovering the origins:

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If Trump is elected as President, what does it mean for the Fed?

February 25, 2016

It is one thing to reform the Fed, completely another to see Trump first getting elected as President and then reforming the Fed.

Things have become so negative for Federal Reserve (and ECB and BoE and BoJ and SNB and..??) that it has become a punching bag of sorts. Ryan McMaken of Mises has this bit on whether Trump will reform the Fed or not. Even more interesting is that all President candidates have spoken about reforming the Fed. From an institution which was beyond reproach some years ago, Fed has become such a reproachable organisation:

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India on the verge of ‘a million mutinies’?

February 25, 2016

R Jagannathan of Swarajya has a piece raising several controversial (if not millions) ideas.

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From Antwerp to London: The decline of financial centres in Europe

February 24, 2016

A superb paper by Prof. Peter Spufford on the topic:

When Ortelius, Abraham Ortel, the humanist son of a successful merchant, was born in Antwerp in 1527, it was already the commercial metropolis of Europe and had also become its dominant financial centre. As a young man in the 1540s and 1550s he lived through the years of Antwerp’s greatest prosperity. He did not die until 1598, by which time Antwerp had been reduced from the great metropolis of the west to a place of only regional commercial importance for the Spanishoccupied Netherlands. Nevertheless it was still the financial centre of Europe. This time lag between industrial and commercial decline on the one hand and decline as a financial centre on the other is one that has been repeated time and again.

As an historian whose metier compels him to study change over time, I am aware that our present arrangements, like those of Ortelius’ lifetime, are not anything more than temporary. Antwerp was by no means the first financial centre in the west. London will by no means be the last. And in this lecture, named after Ortelius, I will try to explore some aspects of the continuous rise and fall of financial centres like Antwerp and London over the last seven centuries, and even to glance back a little earlier to Arras and Genoa.

At the beginning of the fourteenth century there were two dominant financial centres in Europe, Florence for southern Europe, and Bruges for northern Europe. Communication between the two was by couriers, who, by the mid-century, were setting out in each direction once a week and took about three weeks to cover the distance. What then gave Florence and Bruges their financial pre-eminence? Both developed as focal points for industry, and as commercial centres, before becoming financial centres. This turns out to have been the normal pattern for seven centuries.

 

How is it that Indian private sector banks don’t have NPAs and losses?

February 24, 2016

The blogger got into a very interesting discussion with friends who are financial market professionals and very savvy ones at that.

One question that cropped up was how is it that losses in banking are limited mostly to the public sector banks and not the private sector ones? If we have the same set of corporates, why is it that corporates choose to default with public banks and not private ones?  Before viewers think this was some left oriented socialistic leaning group, it was just the opposite. The views of the discussants had emerged after seeing the way banking has been working in India and globally.

This question is going to be dismissed by most as a worthless discussion. Public sector banks make losses as they are owned by govt, have governance issues etc. Obviously, this answer chooses to ignore the kinds of malfeasance we are seeing in global private banks. But this issue of public vs private banks cannot be easily dismissed now with huge losses showing in a foreign bank which actually believes itself as an Indian player.

So what exactly is going on?

In the discussion, one was enlightened on how banking actually works between public and private banks:

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Keynes’s General Theory at 80 and will it be valid in 2036 as well?

February 24, 2016

Robert Skidelsky, Keynes biographer writes on the 80th anniversary of Keynes’ magnum opus – The General Theory.

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GIFT to create regulatory crisis for Indian regulators

February 23, 2016

In this era of overt praise for India’s financial markets and its policies, here is some straight talking from Percy Mistry.

He starts with GIFT city troubles and then speaks on other issues as well……

How 118-year-old Godrej & Boyce is trying to unlock growth drivers among its legacy businesses…

February 23, 2016

Suman Layak of ET does a profile of how gen next of Godrej family is trying to make changes in 118 year old company.

Nice bit..

Governments are trying to close the academic mind worldwide..

February 23, 2016

Chris Patten who claims to be the Vice Chancellor of most universities writes on a disturbing trend across the world – govts trying to intervene and influence univ teaching:

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How North Korea Funnels Cash Into the Country

February 23, 2016

A team of Bloomberg analysts have this interesting piece on the topic. In sum it is all via a complicated network so that it is difficult to find the trail:

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Should ECB have twin goals as Fed?

February 22, 2016

Biagio Bossone and Stefano Sylos Labini look how ECB could have better managed the crisis.

They pick a note from Franco Modgiliani  and other scholars which argued for a broad based ECB:

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Economic illiteracy, Lemming effect, Holy grail and Keynes..

February 22, 2016

TCA Srinivasa Raghavan hits out at the usual economic commentary in India which obsesses with fiscal deficit target.

He starts with economic illiteracy  and lemming effect:

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Is MP pulling out the ‘M’ from BIMARU?

February 22, 2016

Suraj Gupta has an article on Madhya Pradesh’s  agri economy. He highlights progress in MP’s most of agri indicators.

If the story is somewhat true, it shows how things can be done in India without making much noise over ministers and reforms.

 

What ails modern economics? Too much math and too little history..

February 22, 2016

Pramit Bhattacharya of Mint has this nice piece on state of modern economics. This word modern is problematic as it usually connotes anything modern is better than its past avatar. However, this may not be the case with most such modern things and surely not with modern economics.

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