infotonic

That US is slipping into another recession is not something new. It is a point that nearly everyone agrees on. But the bigger question is how the US would come out of this mess? As suggested by economist, Graeme Maxton, US needs to reduce its debt burden. And the only way to do that is by raising the tax rates in the country. Raising rates would mean the consumers would have to cut back on their spending and pay back the debts instead. Will this work? Need to wait and watch!

Look at government inefficiency, food prices have galloped at an alarming rate over the last few months. Some blame it on the poor monsoons. Some blame it on hoarding by greedy middlemen. In my opinion, the government unknowingly itself is a massive hoarder. As per a report in a financial daily, the stock of rice and wheat in government granaries is way above the minimum requirement. Sadly, much of this excess stock is stored in the open. It either rots or feeds pests. In my view, this is a national shame. We cannot get the basics right in such a crucial area when food prices are spiraling out of control and millions of Indians still go hungry. Such stocks should be stored properly and released in small lots to stabilise prices.

I was listening to Mr Montek Singh Ahluwalia yday; this thought was triggered when he was discussing self regulation vs external regulation in microfinance seminar. That set me thinking; how big a role has the government played in the recent India growth story? That's a question of great importance to all of us. After all, we place a great deal of emphasis on the management of a company while investing. Surely the same should apply to the custodians of the overall economy.Successive governments keep stumbling in getting their policies right. Indian entrepreneurs do what they have to do in spite of the government.An enlightened political class would do wonders for our economy. But in the era of walkouts and note laden garlands, the most businessmen expect is the politicians' benign neglect.

Is Power is the new dotcom? The report in some media papers refers to the surge in the number of companies of all kinds wanting to get into the power business. This is a scary scenario. This is given that power is not an easy business to pursue.With a host of regulations and execution risks that even large power companies face, new players will have a tough time making any business sense of their overtures. Forget the small companies, i am also wary of some large companies that recently floated IPOs to raise money for their power sector plans and this is where i believe things could turn out to be worse than the dotcom bust. With backgrounds in non-related sectors like real estate and trade, some of these companies are just jaywalking into the power minefield. And when they would realize their incapabilities in the future, probably it might've been too late for them, and their investors. It is important to stay away from such companies that are foraying blindly into the power secto...

If everything goes well, in a few weeks from now, we may have sown the seeds of a major bull run. We say so because a new wave of stimulus money is most likely to be unleashed in the biggest economy of the world, the US. Sensing that the current efforts are not keeping more people employed at their work, President Obama has called for a major new burst of federal spending. "We avoided the depression many feared. Our work is far from done," Obama thundered in a recent speech. He further added that he wants to spend new money for highways and bridge construction and for ensuring adequate social security net for the US citizens, especially to the unemployed. And the figure that is being talked about is in the region of US$ 170 bn. Of course, given the kind of fiscal mess that the US is in, spending more would have meant going further down the path of suicide. But what has given some government authorities hope is the unexpected windfall that the government is likely to make from...

Hero Honda: Strong performance continues Hero Honda (HH) continued its robust performance with sales of 0.38 mn units (up 32% Y-o-Y, 7.7% M-o-M) for November 2009. It seems to have recouped from the impact of a strike last month. Despite increased competition, HH continues to dominate the core executive segment and benefits from its strong rural presence. With underlying demand remaining strong, the company is clearly on the path of beating its guidance of 4 mn units for the full year (particularly, with inventory at the lowest levels). Maruti Suzuki: Domestic segment drives growth Maruti Suzuki’s (MSIL) domestic volumes, at ~76,000, were up 60.1% Y-o-Y and 6.7% M-o-M. Key growth driver has been the A2 segment that performed well Y-o-Y as well as M-o-M, mainly on account of improved production at Manesar plant (manufacturing Swift); the waiting period for Swift has declined in the past month as allocations have increased. Export volumes declined 17.4% M-o-M which may be indicative of ...

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...