Archive for May 2nd, 2017

Kokum fruit has high marketing potential..

May 2, 2017

After jackfruit, it is encouraging to see kokum fruit too get some attention too. Also really nice to see a common name behind both these initiatives: Shrre Padre of Adike Pathrike.

Squash, juice, ointment, jam, multi-purpose powder — all value added products made from Kokum — attracted visitors at the first Kokum Mela of Dakshina Kannada and Udupi at Muliya village, near Vitla, on Monday.

Dried Kokum rind and a spicy value added product of Kokum were among the other attractions. The ointment was made from Kokum butter. 

Adike Pathrike, a farm monthly, Puttur; Halasu Snehi Koota, Neerkaje; and Western Ghats Kokum Foundation jointly organised the mela.Speaking at the workshop to highlight the scope for marketing Kokum and its value added products, Shree Padre, Executive Editor, Adike Pathrike, likened the fruit to “Kalpa Vruksha”.Mr. Padre said that probably only 30 % of Kokum available in the Konkan belt was being used now for making value added products or for direct consumption. Marketing potential for the fruit was high.

Somashekara B.S., author of Garcinia Brothers, said that as Kokum has three major attractive colours — red, yellow and green, the scope for marketing was high. Mr. Somashekar said that there was high scope for Kokum hybridisation.

He said that fruit vendors showcased fruits such as apple better in stalls by giving least priority for wild fruits and local fruits during season. Sometimes, they even kept local and wild fruits on the floor.

One got introduced to Kokam Sharbat on Mumbai’s local train stations and always looked forward to drinking the same. It was really refreshing and provided respite from Mumbai heat.

But how all these local fruits have been lost to fancier varieties.


Central Bank Legal Frameworks in the Aftermath of the Global Financial Crisis

May 2, 2017

Perhaps one of the more important papers on central banking.

There is a lot of research on how and whether central bank objective functions have changed or the independence. But there is hardly any research on the most important thing that drives central banks at the first place: Their legislation, saw in India’s demonetisation how central bank law is so crucial to understanding monetary affairs.

It is written by Ashraf Khan of IMF and looks at how central bank legislations have changed post the financial crisis.

Drawing on the 2016 update of the IMF’s Central Bank Legislation Database, this paper examines differences in central bank legal frameworks before and after the Global Financial Crisis. Examples from select countries show that many central bank laws have undergone changes in objectives, decision-making, accountability, and data collection. A wider cross-country survey illustrates the common occurrence of price stability in central bank objectives, and varying practices in defining financial stability, “independence” versus “autonomy,” and who within a central bank determines monetary policy. The highlighted facts illustrate the uses of the database and could be a starting point for further analyses.

Even small changes in the central bank legislation should be keenly watched. There is usually a larger political economy game at play behind these small changes and the intent is much larger than initially thought. Moreover, the impact may be seen many years later as we see in case of Section 7 (1) in RBI Act.

Thus, instead of just focusing on usual literature on inflation/employment or central bank independence, we should look at the legislation and the changes.

Central Banks’ obsession with price stability leads to economic instability

May 2, 2017

Frank Shotsak warns against the price stability obsession, He says in all this thinking behind inflation obsession, we ignore distributional aspects of monetary policy.


Changing Indian Mutual Fund’s serious disclaimer to a more humorous one…

May 2, 2017

Dhirendra Kumar of Value Research again does a great job of thinking thorough basic investment matters. Despite the best intent the current Mutual Fund investment disclaimer is serious and non-attractive:

Mutual Fund investments are subject to markets risks. Please read the offer document carefully before investing.

Market risks? Offer document? And above all read? It has three things which would scare most investors.

The idea is not to remove but to try and make it more readable. He quotes from an American version:

And here’s the equivalent statement of an American fund from around the year 2000, which I found via the blog of Jason Zweig, who writes wonderfully about personal finance in Wall Street Journal. Without further comment, with some editing for length:

First of all, stock prices are volatile. Well, duh. If you buy shares in a stock mutual fund, any stock mutual fund, your investment value will change every day. In a recession it will go down, day after day, week after week, month after month, until you are ready to tear your hair out, unless you’ve already gone bald from worry. It will insist on this even if Gandhi, Jefferson, John Lennon, Jesus and the Apostles, Einstein, Merlin and Golda Maier all manage the thing. Stock markets show remarkably little respect for people or their reputations.

While the long-term bias in stock prices is upward, stocks enter a bear market with amazing regularity, about every 3 – 4 years. It goes with the territory. Expect it. Live with it. If you can’t do that, go bury your money in a jar or put it in the bank and don’t bother us about why your investment goes south sometimes or why water runs downhill.

Aside from the mandatory boilerplate terrorizing above, there are risks that are specific to the IPS Millennium Fund you should understand better. Since most people don’t read the Prospectus (this isn’t aimed at you, of course, just all those other investors), we thought we’d try a more innovative way to scare you.

We buy scary stuff. You know, Internet stocks, small companies. These things go up and down like Pogo Sticks on steroids. … While we try to moderate the consequent volatility by buying electric utility companies, Real Estate Investment Trusts, banks and other widows-and-orphans stuff with big dividend yields, it doesn’t always work. Sometimes we get killed anyway when Internet and other tech stocks take a particularly big hit. The ‘we’ is actually a euphemism for you, got it?

Received Wisdom can turn on a dime in this business, and when that happens prices fall off a cliff. Even if we were really smart and stole these companies, if their prices run way up we are still as vulnerable as if we were really dumb and paid that high a price for them to start with. … Just so you know. Don’t come crying to us if we lose all your money, and you wind up a Dumpster Dude or a Basket Lady rooting for aluminum cans in your old age. Please e-mail us if we haven’t scared you enough, and we’ll try something else.

Both the above disclaimers–the dull Indian one and the funny American one–are equally correct, of course. However, only one of them is actually useful in communicating any kind of fundamental truth about investing. No prizes for guessing which one. Of course, no prizes also for guessing that the American fund which issued this disclaimer never managed to collect much money from investors. After all, telling the plain, hard, uncomfortable truth is so unusual in the financial services business that investors wouldn’t really have responded to this kind of a statement.

It is way too long as well. However, it has a concise lesson as well:

But the truth is that if you invest in equities or equity mutual funds, then you should print out this disclaimer and pin it up on a board. There are two aspects to what it says. Both are summed up in the sentence ‘While the long-term bias in stock prices is upward, stocks enter a bear market with amazing regularity, about every 3 – 4 years’. Every equity investor must take this to heart.


Joan Robinson: Solutions offered by economists are no less delusory than those of the theologians

May 2, 2017

From Economic Sociology blog. How stalwarts of economics questioned the value of economics:


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