infotonic

The crisis is not over yet. Not by any stretch of imagination. The shockwaves from Dubai proved this in ample measure. The once sprawling emirate kingdom is now finding it difficult to repay its debt obligations. And investors are busy analyzing which one would be the next country to follow suit. Not that there aren't enough contenders. Infact, the list is bigger than any other time in history. As per LiveMint, OECD has already warned that the world's 30 leading industrialized economies will see their outstanding public debt to grow to 100% of their GDP in 2010,a near doubling from the percentage 20 years ago. Now imagine what would happen if creditors refuse to lend to the governments anymore? While the governments could still resort to a lot of methods, sadly, none of them promise a swift and a strong recovery in the near to medium term. In other words, get used to anemic and subpar growth in economies with a significant amount of outstanding debt vis-à-vis the GDP. So how wi...

Q2FY10 GDP surpasses expectations by leaps and bounds India’s real GDP during Q2FY10 recorded 7.9% Y-o-Y growth rate, leaving India Inc. gaping and pointing at Y-o-Y H1FY10 growth of 7% (comparable with 7.8% Y-o-Y in H1FY09). Agriculture escapes fall; manufacturing, trading lead recovery The strong growth is on the back of a sharp rebound in industrial activity and sustained momentum in service sector growth. Nevertheless, it was the agriculture sector that surprised market estimates by growing ~1% Y-o-Y vis-à-vis estimated decline. Historical trends, however, suggest that the severe rainfall deficiency (deficit of ~23%) during the monsoon season of FY10 is bound to have a sharp adverse impact on the growth of agriculture GDP in either Q2 or Q3FY10. On the other hand, manufacturing sector clearly stood out as the growth propeller, owing to improved performance of domestic-focused sectors, possible reflection of a lagged impact of stimulus measures, significant inventory re-stocking, be...

The US dollar has received a lot of bashing in recent times. And why not? The US economy is in the doldrums, unemployment is soaring and the deficit has widened all of which has put immense pressure on its currency. So much so that there have been voices in many quarters questioning the dollar's status as the world's reserve currency. China has been at the forefront suggesting that the US dollar should be replaced with another reserve currency. However, the MD of International Monetary Fund (IMF), Dominique Strauss-Kahn has said that confidence in the dollar isn't under threat despite the fact that the debt on US' books has bloated. And his view is endorsed by the Indian Prime Minister Manmohan Singh who also believes in the strength of the dollar. Infact, the PM opines that the current setback in the US is 'temporary' and that there is no substitute to the US dollar for replacement as the global reserve currency. What is more, he expressed confidence that the c...

It is one of India's most mineral rich areas. It is also one of India's poorest regions. But that has not stopped some of its citizens from charting amazing career paths. No i am not talking about Forbes richest, i am talking about the state of Jharkhand and its governing class. As reported in a leading national daily, a rickshaw puller who entered politics now has two bungalows and a small time contractor who did the same now commands a fleet of cars. Of course, the cake is taken by a daily wage earner who eventually became the Chief Minister - Madhu Koda. While one should not jump to conclusions while the investigation into the alleged Rs 40 bn scam is on, there are some startling numbers already in public domain. Mr. Koda declared a personal networth of Rs 2.4 m in 2005 which swelled to Rs 11.7 m in 2009. That's nearly 5 times the money in 4 years. Two of his erstwhile colleagues Enos Ekka and Harinarayan Rai have personal networths of Rs 14 m and Rs 32 m respectively as...

With the Indian economy slowing down in FY09, many of us felt the pinch in terms of shrinking wallets and rampant cost cutting exercises by corporates leading to the ever palpable fear of job losses. But there were certain people who appeared to have a field day during the year gone by. Yes, I am talking about CEOs of real estate companies, who took pay hikes of nearly 2-10 times despite their respective companies facing a decline in both revenues and profits. In fact, the salary hikes of some of the top real estate companies were greater in FY09 when their businesses were considerably impacted by the economic slowdown. I find the intentions of these managements really appalling. There is a brilliant email doing rounds about confession of a job hopper which talks about these great CEOs. Good management practices call for giving due consideration to the interests of shareholders and customers first, but real estate CEOs seem more concerned about building their booty. It did not matter t...

After subprime crisis and liquidity crisis, it is now the turn of currency crisis. Investment guru Jim Rogers believes that the worst of the economic crisis is not yet over and a currency crisis can happen this year or the next year. And what is the reason he has cited for the same? There is too much debt in the system. For instance in the US, the deficit has soared above the US$ 1 trillion mark and is not likely to reduce dramatically for some years to come. What is more, the gargantuan stimulus packages announced by the Obama administration while they will pull up the economy in the short term, is certain to come back and haunt the economy in the longer term. Hence, the pressure on currencies notably the dollar is likely to intensify. Rogers further believes that the current recovery is a just a consequence of the fact that consumption had plunged so drastically in 2008 that people have to buy things that they need in 2009. And that it would be folly to assume that China would bail o...

There has been much discussion in the media about the crisis in the BJP post Jaswant Singh's ouster and how it will affect the very existence of the party. But from branding p.o.v this is an event that should worry congress, why, u might ask? Cause if so called non-congress moderate forces were to realign they will pose bigger threat to congress; the last 2 elections were won by congress coz of the fact that non-BJP votes consolidated and went to congress i.e. minorities and secular Hindus didn't vote for BJP. If the crisis in the BJP gets worse, the party is likely to split into two. There will be the ideologically right-wing Hindutva section whose fortunes will be guided by the RSS bosses in Nagpur and more importantly there will be a moderate secular segment that will have the likes of Jaswant Singh. It is this segment of the breakaway BJP that will challenge the market leader currently the Congress. Voter will have a choice between the Congress, BJP and a third formation. ...