August 2008 - Posts - An Awkward Corner

August 2008 - Posts

Pakistan's Strange Stock Market Culture

Posted by Niranjan Rajadhyaksha at 
First, there was a riot outside the Karachi Stock Exchange when share prices tumbled in mid-July. Second, the Pakistan Small Investors Association demanded that "all stock prices be frozen at current levels". (Hat Tip: Felix Salmon ) Third, the stock exchange authorities oblige. "Stock prices are free to rise as much as 5% per day, they're...

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Data Point: Singur

Posted by Niranjan Rajadhyaksha at 
Tata Motors will be investing Rs 1,500 crore in the 997 acres at Singur. That's approximately Rs 1.5 crore an acre. That's not much. The Times Of India says in a front-page report on Saturday that the total number of disputed acres across the country is 91,865. The total investment at stake is Rs 2,42,850 crore. The average investment per acre...

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Memorable Lines: Or, Coase, Hayek and Socialism

Posted by Niranjan Rajadhyaksha at 
"I regard socialism as merely a question in transaction cost economics. Almost everyone else thinks it’s a matter of striking moralistic poses." That's Chris Dillow here . I tend to agree. Socialists should stop being moralistic and read a bit of Hayek and Coase. Share this post: email it! | del.icio.us! | digg it! | newsVine!

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Inflation 101

Posted by Niranjan Rajadhyaksha at 
I wish more Indian politicians and, alas, economists read this little explanatory note by Steve Horowitz. Hopefully that will help counter the popular view that our current tryst with high inflation is because of oil prices rather than excess money supply across the world. Horowitz has started a monthly series called Ask Professor for the Fraser Institute...

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Neuroscientists Advise Journalists

Posted by Niranjan Rajadhyaksha at 
Sam Wang and Sandra Aamodt offers some interesting tips to journalists here . "Because of the way humans process information, political journalists who think they are dispelling false beliefs may actually be spreading them. Two brain experts offer ground rules for reporters who want to avoid becoming accessories to disinformation campaigns. Rule...

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Credit Crisis: CFOs Get Another Task

Posted by Niranjan Rajadhyaksha at 
Amol Agrawal at Mostly Economics catches a UBS press release on the appointment of a new chief communication officer. Amol points to this particular sentence from the release: " Financial communications will now be part of the Group Chief Financial Officer function." "Surely looking at the UBS shareholder report and the ongoing mess,...

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Mobiles Help The Poor: Even Jeffrey Sachs Says So

Posted by Niranjan Rajadhyaksha at 
"The digital divide is beginning to close," announce Jeffrey Sachs in Guardian, the British newspaper. Read the full article here. He says the world's poor have benefitted immensely from mobile technologies. "Extreme poverty is almost synonymous with extreme isolation, especially rural isolation. But mobile phones and wireless internet...

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The Next Big Idea?

Posted by Niranjan Rajadhyaksha at 
We all love a smart idea that is easy to explain and that can be casually thrown into weekday presentations and weekend conversations. Think Long Tail, Wisdom Of The Crowds, World Is Flat, Blink and so on and so on. Here's one candidate for the Big Idea of 2008: The Gridlock Economy. Author: Michael Heller, a Columbia Law School Professor. The basic...

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Credit Crisis: What Is ICICI Bank Up To?

Posted by Niranjan Rajadhyaksha at 
ICICI Bank has sold $275 million worth of credit derivatives. I wonder why? The bank's spokesman has been quoted as saying that the sale is an attempt to reduce mark-to-market (MTM) losses. That may be technically true. If you do not own the derivatives, you do not have to make provisions and book MTM losses. But there will be equivalent trading...

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Give Them Cake ... Sorry, Cash

Posted by Niranjan Rajadhyaksha at 
Mexico has run a social security programme whose success has attracted worldwide attention. The system is called "conditional cash transfers" --- the government transfers cash to poor households who meet certain very simple obligations, such as innoculating children or send children to school. The process cuts out most of the welfare bureacracy...

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Vikram Pandit's Office Furniture

Posted by Niranjan Rajadhyaksha at 
Vikram Pandit is desperately chopping and changing Citigroup. The latest: a reorganization of the Asia unit. (See this report.) But have there been more mundane changes as well --- such as the decor in Pandit's office? I have been wondering ever since I read a new profile of Pandit in business magazine Portfolio. But there are no lavish decorations...

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Data Point: Short Sellers

Posted by Niranjan Rajadhyaksha at 
"More than $1.4 trillion of equities worldwide are now on loan, about a third higher than at the start of 2007, data compiled by Spitalfields Advisors, the London-based firm specializing in securities lending, show. Almost all of that is being used to speculate shares will fall, according to James Angel, a professor at Georgetown University who...

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Tigers or Tatas? Why not both?

Posted by Niranjan Rajadhyaksha at 
Robert Kraft and Vijaya Ramachandran say that the World Bank's right hand does not know what the left hand is doing. So it launches a massive programme in June to protect the mangrove forests on the India-Bangladesh border to protect the territory of the Bengal tiger. And International Finance Corp. the World Bank's private sector lending arm...

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Sewer Rats and Commodity Prices

Posted by Niranjan Rajadhyaksha at 
Petty thieves seem to have a good sense of what's happening in the commodity markets. The Brihanmumbai Municipal Corporation (BMC) has been struggling with a strange problem. Manhole covers are being stolen and sold in the scrap markets of the city. These covers are made of cast iron, and prices of this metal are shooting up. Around a thousand are...

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iPhone, Nano and Pricing Models

Posted by Niranjan Rajadhyaksha at 
American consumers spent more on fuel than on cars in May and June, says Bloomberg in this story. "Prices of cars, particularly on a quality-adjusted basis, have been trending lower for many years, and the price of gasoline is obviously hugely higher over the past few years,'' said Dana Johnson, chief economist at Comerica Bank in Dallas...

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