Intelligentguess

So, now the communists want the government (the government that they themselves support and ensure that it does not take any decisions) to roll back the decision to grant freedom to public sector undertakings to invest a portion of their surplus funds in public sector mutual funds.

Frankly, I support their demand.

But not for the reason that they cite. It’s hilarious. The commies say that this decision would only ensure that foreign investors heap handsome profits. This only serves to show their naivete when it comes to matters of economy and markets.

It needs to be rolled back or should I say modified so that public sector undertakings can invest in all mutual funds, not just those that belong to the public sector itself. This ensures that there is a level playing field for all. No undue or unfair advantage should be provided to select entities based on lineage. Let competition rein and performance decide the turn of events in the marketplace.

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DNA has published a small piece written by me on the subject of stress testing for Indian banks and financial institutions.

Here’s the link.

Feedback and Comments are welcome.

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The online edition of the Wall Street Journal reports

Two of the world’s best-known interest-rate experts, the “Maestro” and “The Bond King,” are now playing for the same team.

Alan Greenspan, returning to his roots as an economic consultant, has signed up Allianz AG’s Pacific Investment Management Co. as his first client since leaving as chairman of the U.S. Federal Reserve. Pimco’s chief investment officer is the widely followed bond king Bill Gross.

Among the predictions Mr. Greenspan has made for his new client: World interest rates are headed higher in the next few years.

Under the arrangement, signed this week, Mr. Greenspan will participate once each quarter in …

The full story is here (Subscription required).

Link via email from S Vaidyanathan

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India has urged the International Monetary Fund to usher in reforms to reflect the new world economic reality.

In a recent speech at the IMF, Rakesh Mohan, the deputy governor of the Reserve Bank of India said

The challenge today is to achieve this reform through a new, simple, transparent and linear quota formula. We believe that this is possible if we work towards a new quota formula that seeks to achieve two outcomes. First, such a formula must result in the rebalancing of quota shares in keeping with the economic changes that have taken place globally. Second, and equally important, is the objective that quota shares of low-income countries are protected to the fullest extent possible. We find that these twin outcomes can only be met if, in the hypothetical new formula, GDP is computed entirely on purchasing power parity (PPP) basis. No halfway house of blending GDP at market exchange rates with GDP on PPP would meet these twin objectives. Furthermore, the ‘openness’ variable in the calculation of quotas needs a close scrutiny in the context of countries having a common currency. We are of the view that our proposal for comprehensive reforms alone will result in adequate, equitable and appropriate representation for developing countries. Such a broader representation of the developing countries would enhance the acceptability, ownership and effectiveness of the Fund’s programmes and policies.

GDP on PPP basis.

Now, I’ve read somewhere that India ranks No.4 (behind the US, China and Japan) in size of the economy when measured by GDP on PPP basis.

No Wonder!

Full Text of the speech

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The Abel Prize in Mathematics for the year 2007 has been awarded this year to Chennai, India born Srinivasa S R Vardhan (pictured alongside).

The Abel Prize is the closest that Mathematics has to the Nobel Prize. It was instituted in the year 2002 by the Norwegian Government.

Vardhan currently teaches at the Courant Institute of Mathematical Sciences, New York University, the leading institution in the field of Applied Mathematics.

Coincidentally, the 2005 prize also went to a faculty of the Courant Institute , Peter Lax.

Though Vardhan has been based out of America for the last 40 years, Indians around the world would still be proud of his achievement. Our congratulations to Vardhan on this feat.

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Link from : the eminently readable PRD blog - who found it on  www.despair.com

Finds a place here since market professionals can relate to it.

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