Blinkered view: Sinha Panel uninformed by crisis
Even the financial crisis had its blessings, and one was that it forced rethink on a host of market nostrums that had come close to becoming universal ‘truths’. Such a blessing, however, has completely bypassed the Report of the Working Group on Foreign Investment, which single mindedly focuses on one constituency: portfolio investors . Take, [...]
Persisting uncertainty
Economic indicators from the United States and other developed countries, since the beginning of August, strongly suggest, at the very least, heightened uncertainty over their near term growth prospects. That the industrial countries, as a group, were expected to trail the developing nations in the recovery phase was anticipated. But now even the [...]
Satyajit Das: European delusions of stability
Pre-summer debt concerns of Greece, Spain and Portugal have receded. Market volatility and angst have eased. As markets return after the summer break and normal activity resumes, caution is the watchword. Greece passed its initial inspections carried out by the supervising “Troika”— comprising the European Central Bank (ECB), the European [...]
Protectionism in check
Although the global economic recovery after the recession has been fragile and uneven, trade among countries has bounced back after a sharp decline a year ago. Between October, 2008 and January, 2009, global goods trade dropped by nearly 20 per cent. Several factors that were behind last year's plunge assume significance in the context of the [...]
US and the chaos of collapse
A Russian chess grandmaster once argued for a simple, but deadly, strategy. The best move is the move just one step ahead: No grand strategy, no complicated moves and pretty much random. It’s an infectious idea for those who have little faith in intellect and complex arguments. There are millions who believe life and events can be so [...]
Una Galani: Pain or more pain
Dubai World creditors face painful choices. The conglomerate is close to a proposal for restructuring $26 billion of debt. But if lenders resist the deal, the process moves into uncertain territory. The plan is expected to cover debts, mainly unsecured, of around $20 billion owed to 97 banks. It will also encompass $4 billion due indirectly to [...]
How To End A Greek Tragedy
The tragedy in Greece is out of character. It is premature: the traditional Dionysia festival for Greek tragedy is at the end of March. Besides, a Greek tragedy brings a great figure down, thanks to his own mistaken action. But here, the Greek mistakes on fiscal policy are bringing down the euro, and distressing big European players Germany and [...]
A V Rajwade: Deficits and financial innovations
It hardly needs to be stated that the safety and sanctity of sovereign debt are the underpinnings of the entire debt market in a country. One of the “benefits” of a liberal capital account for developing countries was supposed to be that bond traders employed by investment banks, by shorting the bonds in global markets, would “discipline” [...]
Subramanian Swamy: A crisis and an opportunity ahead
Finance Minister Pranab Mukherjee is not like his predecessor. But he is without any soft options today, shackled as he is by the recent past of the Finance Ministry's stewardship. Hence it is no surprise that despite a heroic effort to put together a dynamic budget, he has produced what could at best be termed a damp squib. The global [...]
Dispelling Greek myths
The Greek economic crisis continues to test the political will of all involved. The country's budget deficit is €300 billion. It owes $75.5 billion, $64 billion, and $43.2 billion to French, Swiss, and German banks respectively. George Papandreou, the centre-left Prime Minister, has proposed public expenditure cuts and savings measures to reduce [...]