Tuesday, June 30, 2015

Towards Quality: Role and Responsibility of Lecturers


Towards Quality: Role and Responsibility of Lecturers
  
The purpose of this rudimentary Paper is merely to facilitate discussions on the subject matter and to attempt to understand and appreciate the expectations in regard to the role and the constraints testing a lecturer at undergraduate and postgraduate levels. Some issues are raised here with the objective of provoking discussions and seeking solutions through collective wisdom.

The paper tries to set out the following:
a)      To identify the role and responsibility of a lecturer;
b)      For internalization of the context in which the lecturers are working ;
c)      To place the subject in its proper perspective with a view to initiating a discussion on the subject.


The Context:

A student remains with a school for long years. All the time, in school, he or she is receiving knowledge and ideas. Education at this pre-College stage has a special importance because in these years when the human mind is most impressionable, and also because most of the students will leave off formal education after completing class XII. The students are under the care and influence of the pre-primary, primary, and secondary school teachers during the most formative years of their lives. The learning there is of considerable significance to lecturers but is an exogenous and uncontrollable variable.

While education in the school level is primarily national and value-oriented, the education at the Professional College like ours is internationally biased and attempts to make the student a global citizen adding value to the business community who are our direct sponsors. The transition from the school to a professional mould is quite a challenge. The international targeting makes education quite different from what the students have been used to in the past.

Lecturers endeavour to train and mould the minds of the young people so as to make them worthy financial and / or information technology keen citizens. The training that we impart is supposed to accelerate the pace of growth of the nation. That change must make for a better and healthier nation. That means that a tremendous responsibility rests upon the lecturer to mould young minds into valuable assets in economic building.


 The Lecturer Perspective: The Limits to the Discharge of the Responsibilities:

The Need For An Attitudinal Change

There is an emergent need to be a catalyst for change: the transformation from a lighter syllabus to a heavy, voluminous, technical vocabulary driven context is a tremendous challenge before the lecturer. The difficulties of expressiveness and communication in the student tend to be impediments. They even appear to give the student a certain restraining complex even as he sets out for this great journey of learning.

The Lecturer is aware that he is a change agent here. Instilling an attitudinal change requires a conviction in the catalyst.   There has to be an attitudinal change manifest in the individual lecturer concerned; he (or she) needs to be galvanized with certain dynamism and a spirit of dedication that transcends the ordinary. There has to be a powerful motivation.  

The Need to Inspire as much as to Instruct
Educators are often called instructors, but the student seeks inspiration more than instruction perhaps in greater measure. The task is daunting when weighed against the background of the fact that at least some of the students tend to be working long hours before attending classes.  By the time they reach the lecturer, they are tired if not fatigued. This is an exogenous, uncontrollable variable. The lecturer has a motivational element to facilitate the absorption of complex tasks.

Need to Arouse a Scientific Temper
The need to balance between an exam driven student and the need to instill deep abiding knowledge in him (which his sponsor and our Management expects) is a challenge. To make the student mind dedicated to an evidence adducing learning is a cumbersome task. Given that reading habits are weak in the formative years, and that the influence of the visual media is pronounced, this is a daunting task. Despite attempts, sometimes, students still expect lecturers to coach rather than facilitate. The lecturer’s efforts to challenge the student to higher responsibilities of independent reading are fraught with mental obstacles in the recipient himself.

The need to post him for examination
This is what the student expects most in the lecturer. The student’s singular worry is how to pass the examination. The benchmark for the performance has also gradually turned to be the performance of the student as a group in the examination. This requires a certain re-orientation on the part of the lecturer by consciously driving towards exam focus rather than knowledge imparting. Are lecturers fully examination technique driven? Most lecturers would think so; but then are there reflections of such a belief in the ground reality?



The need to cover vast portions in given time frames.
In a given Semester (trimester) time frame, the balance between the occasional weak comprehensive abilities of at least a segment of the students and the short time frame is a matter of time pressure[1]. Given that students do complain about non- availability of time after class and office hours, over the last few years there has been a stretching of contact hours in all specializations: from MBA to Diplomas. This has to be viewed against the backdrop of profit motivation that is being suggested in the business development context.

The need for effective Faculty time
Sometimes faculty are burdened with correspondence and administrative duties at least indirectly. Faculty has to think, read and write to improve.

The need for Unanimity of Approach
The lecturers need to present a coherent approach with regard to the approach to the student community, particularly in regard to discipline. The Team View strengthens the students to respond positively.

The need for Coordinated Approach to Learning
Often, lecturers are seen to be working in departmentalized islands with a willingness but no-opportunity to share with colleagues. This is manifest sometimes even to the student. Lecturers may be observed not to move in tandem, but as departmentalized bureaucracies. Experience sharing is a regular event or a semi-annual event, which needs to be institutionalized. There has to be organizational memory and collective wisdom.

  
Need for Long Termism rather than Ad-Hocism
Gradually, there appears to be a short ‘termism’ in our approach to solutions and people. This has a brought about incertitude in the minds of the affected. As organizations are permanent, even if individuals are transient, there appears to be conscious need for institutionalizing long ‘termism’ particularly with the younger stakeholders. There is a need for identification with the institution in totality in case there has to be longer-term research orientation.

The Perspective Shift:
Lecturers need to move over to be a place of ‘excellence in knowledge’, to ensure personal development of both the students and the staff and bring in more confidence in themselves.  How exactly do we do that?





[1] Selectivism in subjects / modules/ chapters may often misfire. So there is need for comprehensive coverage.
Comments on this paper may be sent to Dr. Jayaram Nayar at  jaynayar@gmail.com

Monetary Fatigue..???. need fiscal stimulus...

IMF  now seeks fiscal intervention:
Quote
Fiscal policy is an effective tool for supporting growth. While it is difficult to disentangle the impact of fiscal reforms from other factors and to determine causality with certainty, the analysis suggests that they could lift medium- to long-term growth by ¾ of a percentage point in advanced economies and even more in developing economies.
Unquote

Source:
FISCAL POLICY AND LONG-TERM GROWTH  
Electronic copies of IMF Policy Papers are available to the public from http://www.imf.org/external/pp/ppindex.as

Federal Reserve Bank of Atlanta data reassuring ...

According to the Atlanta Federal Reserve's Wage Growth Tracker , "a new series constructed using data from the Current Population Survey, the median increase in wages for individuals working in May 2014 and May 2015 was 3.3 percent (reported as a three-month average).
Wage growth by this measure was essentially unchanged from April and 1 percentage point higher than the year-ago reading. The current pace of nominal hourly wage growth is similar to that seen during the labor market recovery of 2003–04 and about a percentage point below the pace experienced during 2006–07, which was the peak of the last business cycle.  " ( http://macroblog.typepad.com/)






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Cheaper Yen, Jap Companies Cheer

Japanese companies were upbeat. Some relief in a Greece induced gloom world.


Tankan Explained : (source :Bank of Japan) https://www.boj.or.jp/en/statistics/outline/exp/tk/extk03.htm/#p01

1.Purpose of survey

The Tankan is a statistical survey by the Bank of Japan in accordance with the Statistics Law (Law No. 53 of 2007). The survey is conducted to provide an accurate picture of business trends of enterprises in Japan, thereby contributing to the appropriate implementation of monetary policy.

2. Survey method

The answer sheet is returned by mail or online. The Bank of Japan is obliged to keep confidential information obtained from respondents under strict security control in accordance with the Statistics Law.

3. Frequency of survey

The survey is conducted quarterly in March, June, September, and December. The survey results are released at the beginning of April, July, October, and mid-December in principle (released at 8:50 a.m. Japan Standard Time). The release dates for the next one year are announced in advance at the end of June and December.

4. Coverage

(1) Tankan

The population of the survey is approximately 210 thousand private enterprises (excluding financial institutions) in Japan with at least 20 million yen in capital, based on the "Economic Census for Business Activity" jointly conducted by the Ministry of Internal Affairs and Communications and by the Ministry of Economy, Trade and Industry in February 2012.

Adani's Carmichael Mine is unbankable says Queensland Treasury, reports SMH

 (Excerpts from Lisa Cox' Article of Sydney Morning Herald)
http://www.smh.com.au/business/mining-and-resources/adanis-carmichael-mine-is-unbankable-says-queensland-treasury-20150630-gi1l37.html

  • "Documents released under Queensland's freedom-of-information laws show officials at the highest level of the Queensland Treasury held grave doubts about Indian mining company Adani's capacity to see through its Carmichael coal mine project in central Queensland."
  •           the project was unviable  


·         former under treasurer Mark Gray and principal commercial analyst Jason Wishart, express fears about Adani's high level of debt and identify the mining giant as a "risk" because of its unclear corporate structure and use of offshore entities.

·         On November 11, Mr Wishart said the expansion would put Adani's financial position under "increased strain" while another Treasury briefing notes "the group is highly susceptible to cost shocks".

·         Mr Wishart wrote that Adani Enterprises Limited – the Bombay Stock Exchange-listed parent company for a network of related Adani entities – had total assets of $21.5 billion, but which were "heavily geared" with liabilities of $16.4 billion. "Continued expansion to meet power and mine ambitions will place this financial position under increased strain," he wrote.

·         ...then Under Treasurer Mark Gray that while there was not a funding "boycott" it was "fair to say that there is not a lot of market support for investing in Galilee thermal coal projects at present."

·         "That level of funding interest has been declining with the slide in the coal price over the last two years," he said.

·         He noted funding was also being impacted by a continued "poor outlook" for the commodity as well as pressure from green groups on banks for supporting such projects.

·         "These secret documents make clear that Treasury has serious concerns about Adani's financial ability to actually build these projects and that its demands for proper due diligence have continued to be ignored," Jeremy Tager, spokesman for the North Queensland Conservation Council said."


http://www.smh.com.au/business/mining-and-resources/adanis-carmichael-mine-is-unbankable-says-queensland-treasury-20150630-gi1l37.html

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Monday, June 29, 2015

Reserve bank of Australia Statistics

Reserve Bank of Australia (Release date: 30 June 2015)  data indicates business loans went up by 0.4 percent although there was a slight fall in personal credit. 
Financial AggregatesPercentage change
MonthlyYear-ended
Apr 2015May 2015May 2014May 2015
Sources: ABS; APRA; RBA
Total credit0.30.54.76.2
– Housing0.50.56.27.2
– Personal-0.1-0.10.40.8
– Business0.00.42.85.2
M30.6-0.17.06.5
Broad money0.7-0.16.6
Note:
M3: Currency plus bank deposits of the private non-bank sector, excluding Commonwealth and State Government deposits and interbank deposits. Seasonal adjustment by the Australian Bureau of Statistics.  

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Sunday, June 28, 2015

Hang Seng opens lower

Hang Seng Index
29/06 09:31:00
Current Index
26624.37
Change
-39.50
Change (%)
-0.15%
Today High
26625.57
Today Low
26560.13
Previous Day Close
26663.87


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Nikkei falls too

Nikkei Stock ; 29/6/2015
 in early morning trade 

20,246.33
-459.82 (-2.22%)
Open20,305.97(09:00)
High20,323.51(09:02)
Low20,190.08(09:03)

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Australia opens... much down ...Asx

Sydney Morning Herald says "nvestors are in for a wild ride after Greece called a snap referendum on debt plans and imposed capital controls, raising the very real possibility of a messy Grexit." 
Read:http://www.smh.com.au/business/markets-live/markets-live-buckle-up-20150629-gi06uf


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Greece banks' augur black Monday?

Greek banks closed till 6 July reports AFP. Euro 60 is ATM withdrawal limit.
Capital controls are imposed...

 Greece seems likely to default on Tuesday. .
With the dire warnings of BIS, it looks like the moment of truth is here..
Euro seems headed south.


Without any risk or responsibility...

Achtung! BIS calls the current global system a 'malaise'... is a rout in the offing?

BIS, (Bank for International Settlements) in its latest report says (Excerpts here)
" Between December 2014 and end-May 2015, on average around $2 trillion in global long-term sovereign debt, much of it issued by euro area sovereigns, was trading at negative yields. At their trough, French, German and Swiss sovereign yields were negative out to a respective five, nine and 15 years. Such yields are unprecedented. "


"Policy rates are even lower than at the peak of the Great Financial Crisis in both nominal and real terms. And in real terms they have now been negative for even longer than during the Great Inflation of the 1970s. Yet, exceptional as this situation may be, many expect it to continue. There is something deeply troubling when the unthinkable threatens to become routine."
Such low rates are only the most obvious symptom of a broader malaise,..."
"We argue that the current malaise may to a considerable extent reflect a failure to come to grips with how financial developments interact with output and inflation in a globalised economy. For some time now, policies have proved ineffective in preventing the build-up and collapse of hugely damaging financial imbalances, whether in advanced or in emerging market economies (EMEs). These have left long-lasting scars in the economic tissue, as they have sapped productivity and misallocated real resources across sectors and over time."


Our Comments: Are we seeing a weary central banking; or a monetary fatigue? Is it that they are desolate? is it a prediction of a slippage to economic intensive care?



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BIS says Monetary policy has been exceptionally easy ; cautions on risks of accommodation

"the ultra-low policy rate environment was reinforced with large-scale asset purchase programmes....
The deviation of inflation from expected levels and questions surrounding the sources of price changes underscore an incomplete understanding of the inflation process, especially regarding its medium- and long-term drivers. 

At the same time, signs of growing financial imbalances around the globe highlight the risks of accommodative monetary policies. The persistence of those policies since the crisis casts doubt on the suitability of current monetary policy frameworks and suggests that resolving the tension between price stability and financial stability is the key challenge.  "

(Excerpts from BIS' Annual Report, June 28, 2015)

Friday, June 26, 2015

India's Make in India campaign seems to be attracting FDI

According to the World Investment Report , 2015 of UNCTAD:
  • Global FDI inflows declined in 2014.Global foreign direct investment (FDI) inflows fell by 16 per cent to $1.23 trillion in 2014,
  • mostly because of the fragility of the global economy, policy uncertainty for investors and elevated geopolitical risks. New investments were also offset by some large divestments.

  • Developing Asia (up 9 per cent) saw FDI inflows grow to historically high levels. They reached nearly half a trillion dollars in 2014, further consolidating the region’s position as the largest recipient in the world. FDI inflows to East and South-East Asia increased by 10 per cent to $381 billion.

  • Inflows to India increased by 22 per cent to $34 billion. In terms of sectoral composition, manufacturing is gaining strength, as policy efforts to revitalize the sector are sustained, including for instance the launch of the “Make in India” Initiative in mid-2014.

  • In the “Make in India” initiative, the government identified 25 industries in which India has the potential to become a world leader, including the automotive, chemicals, pharmaceuticals and textiles industries. The government has also prioritized environmentally friendly vehicles and launched a new scheme to provide financial incentives for hybrid and electric cars.
Source: UNCTAD, World Investment Report, 2015.


Tsipras: Managerial Retreat - Lessons from Greece

When a Leader  is pushed in to a corner and has nothing but the wall to turn to: 
a) He takes the battle to his people. He works on the principle of apparent transparency in decision making. However, it actually is that he is on a blind alley. then the leader recalls that 'My enemy's enemy is my friend. ' . 
b) He creates a scenario of distress and darkened future. Of denunciation of an old ally by richer erstwhile allies. 
b) Denounce the opponent in vehement terms :(Tsipras suggested 'blackmail' by lenders)
c) Declaims a higher responsibility: ("Our responsibility is for the future of our country.")
d) He evokes wrong deeds inflicted on his people and seeks retribution for it.( "humiliation of the entire Greek people".)

Tsipras seems to be using symbolic messaging to stir up his people to emotionally delinking from Europe. He is suggesting that they have nothing to lose but their austerity chains. He has turned it into a haves vs have-nots fight.


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Time to buy into Spain?

"In 2014, Spain's GDP grew at a rate of 1.4% while employment did so at 1.2%, the first positive figure since the start of the crisis.

The Spanish economy will grow at a rate of 3.1% on average in 2015, an upward revision of 0.3 pp on the projections published in March.

 Average growth in the first half of the year, in annualised terms, is thus expected to be around 4%.
 expansionary impulses, such as the fall in oil prices and the depreciation of the euro. For 2016, the projections estimate average growth of 2.7%.

The general government deficit met the objective set by the European Council (5.8% of GDP) for the third year running. In 2014, fiscal policy had a less restrictive impact than in the preceding years and was a less prominent conditioning factor of macroeconomic developments.

The public debt/GDP ratio rose in 2014 to 97.7%, 

Spanish household debt stood at end-2014 at 71% of GDP, 10 pp above the euro area average, when in 2010 ... (was) 20 pp above it; non-financial corporations' debt stood at the end of last year at 92% of GDP, 8 pp above the euro area average, when in 2010 the gap was 35 pp.

...non-performing loans (NPLs) to the resident private sector fell both in absolute terms (by more than €24 billion) and in terms of the NPL ratio, which declined by almost 1 pp to 12.9%."


(Excerpts from Testimony by Mr. Luis M Linde, Governor of the Bank of Spain, before the Parliamentary Committee on Economic Affairs and Competitiveness, Madrid, 24 June 2015.)
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"There ain't no such thing as a free lunch." : President of the Deutsche Bundesbank hints to Greece

(Excerpts from Speech of  Dr. Jens Weidmannat  the IIF (Institute of International Finance) Europe Summit, Frankfurt am Main, 25 June 2015),


" If non-viable banks are kept on life support with central bank money, they will go on to make evergreen loans to non-viable companies - a situation which heightens the risk of future problems in the banking system. "

"And if the liquidity is channelled towards sovereigns that find it otherwise hard to access the markets, we run the risk of blurring the lines between monetary and fiscal policy."

"Greece is a case in point here. The emergency liquidity assistance (ELA) - which was originally conceived as a temporary source of liquidity for financially sound banks in return for good collateral - has been provided for a protracted period of time and has become the banks' only source of funding. "

"This casts doubt on their financial solidity. The latter is especially undermined by Greek policy decisions that have sparked capital flight and large-scale cash withdrawals."

"...it should be clear to all the parties to the current negotiations that the Eurosystem must not provide bridge financing to Greece even in anticipation of later disbursements. When banks without access to the markets buy debt of a sovereign which is likewise locked out of the market, taking recourse to ELA raises serious monetary financing concerns."

Respecting the core principles upon which our monetary union is built is not a matter of dogmatic German stubbornness, but a key policy condition for long-term economic prosperity in the euro area and for maintaining popular support for the historic project which European integration no doubt is."

Our Comment: Hint of a fall in the euro in the short run despite Greece being factored in?

Without any risk or responsibility.


Wednesday, June 10, 2015

Managerial Lesson from Merkel in Keeping Tsipras Waiting.

Merkel is  reportedly keeping Tsipras waiting for an appointment to meet her  at Brussels where both are there on an international meet. 

The managerial lesson in this quiet snub (if reports are true) is  that a negotiating tactic. It depicts, nay symbolizes : bargaining power of the supplier of credit. In this case it is much more that of  the bargaining power of the buyer .  (from the 5 forces analysis of Porter).

If your counter-negotiator is weak you may well hammer down the price. You could walk all the way with your price. You know that this is a risk high game and you are bidding up the price. Take it or leave it. You are too big to care for the counter negotiator. 

The message signalled  is that Greece is not high on priorities of Germany any more. Once you send out  message that the counter party is  weak, then  publicize it to be weak. Among Greeks who are moderate, Tsipras loses further face. Thus Germany sends out public signals that they do not care.  Managers have a lesson. Weaken your potential counter party and let it be known that he is weak. You are demoralising him and driving him to a corner to give you the price you know he will ultimately give. . 

For Tsipras, on the other hand, negotiations is a continuum of essential survival dialogues for managers whose tacit aim is to further his career objectives and Greek's growth. For Merkel, , these interactions matter only to display leadership skills. Merkel is clearly sending out as they are 'leader to follower' communication. Merkel  is signalling that leadership is not just a figurehead but automatically elevated further by the snub to a higher pedestal of a leader tough. Merkel becomes effective 'liaison 'chief  but with full control   and the message to the stakeholders is the unparalleled power of the German economy.  

That is also a lesson to competitors. 

Sunday, June 7, 2015

The Long and the Short of It : Crystal Gazing the market for the week


The Long and the Short of the Markets:

Markets seem likely to be more volatility prone this week .

The moment of truth moment for Greece with the probability of a debt debacle  and the Europeans' frustrating lack of consensus.

Australia is languishing in the Chinese shadow. The number of people trapped in long-term unemployment in Australia hit a 16-year high,  unemployed for a year or more has risen by 18 per cent over the past year to 188,000 ; that is almost three times more than mid-2008. Yet Melbourne and Sydney property prices are high, possibly because the Chinese are letting go off domestic property to invest in Australia , riding on the back of a falling Australian dollar which is being encouraged further south.

 John Cryan in Frankfurt as  CEO of  Deutsche ,  (replacing Jain and Fitschen in the latest of a series of leadership crisis among Western banks indicates how there is divergence between the governance of companies and investors expectations. . Banking stocks may see further pressures.

IMF pointed out that the first quarter was a  'shaky' one for the U.S. economy. Revised IMF growth forecast was down to 2.5 percent for 2015.  Data on the labor market has steadily improved with the job growth averaging  about 250,000 per month.  Cheaper oil prices may boost consumption . However, delay in  the housing recovery and the strong dollar  may keep the inflation pressures quiet  so that the Fed needs to raise rates in the last quarter. Global investment activity indicates that even easy liquidity policy is not enthusing investment.
Source - BIS Statistics


Russia and Qatar could lose the right to host the 2018 and 2022 World Cups if evidence is found of corruption in the bidding process. About 14 FIFA officials and sports marketing executives are accused by US prosecutors of taking part in a sweeping kickbacks scheme going back 20 years involving a total of $150 million in bribes. Would sponsor corporate entities  be involved  and would they be sold off on world equity markets?


Gold seems to continue to be gathering dust.  
Emerging economies seem too hot for now. 
G7 meet in Germany seems to have a Russian contain agenda rather than economics. They will speak more on Ukraine and just a whisper  on Greece. 
Schloss Elmau, Germany G-7 Meet 

So the hesitant investor seems to  look to USD  assets for the coming week. When in doubt, get to the safe haven.













Without any risk or responsibility

Friday, June 5, 2015

Cyber hacking raises issues of risks in the Internet of Things

According to an on line report from Reuters[1],  US  authorities are investigating hacking into U.S. government computers, possibly compromising the personal data of 4 million current and former federal employees.

This criminal activity raises several risk issues for the IoT thinkers.

Operational Risk:  Big Data may be hacked into  by human elements who have a criminal intent. It could bring operations of corporations and even nations to a complete halt. 

The systemic risk and contagion risk in interconnectivity are huge.   So there is an urgency  in the need for a  deeper look in to risk- mitigation strategies.  

If operational risk armor has vulnerability, then big data analytic initiatives in business  enterprise s are subject to probable thefts and that is a business risk.  

ISACA[2]  points to amplified technical impact—If an unauthorized user were to gain access to centralized repositories, it puts the entirety of those data in jeopardy rather than a subset of the data. That article points out that there is a huge technical risk  in the IoT. Embedded (IoT) machines, like traditional computing devices, could be mauled by hackers. These cyber attacks could result in damaging outages and be injected with  by malware. As IoT devices are inter- connected to a network, they  are collectively vulnerable.

Finally, there is the possibility of a strategic risk as economic growth patterns can be disrupted by hacking systemically. There could be economic proxy wars waged.  The need to work on a 'threat exists' hypothesis is real. 





[1] http://www.reuters.com/article/2015/06/05/us-cybersecurity-usa-idUSKBN0OK2IK20150605
[2] Internet Of Things: Risk And Value Considerations, ISACA, 2014

Euro area bank interest rate statistics: April 2015


The composite cost-of-borrowing indicator for new loans to corporations  decreased by 4 basis points from the previous month to 2.30% in April 2015.

The composite cost-of-borrowing indicator for new loans to households for house  purchase decreased by 6 basis points from the previous month to 2.25% in April.


This was the 15th decrease in a row since February 2014.



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Bundesbank says Germany on growth path

Bundesbank's expects Germany’s real gross domestic product (GDP) to grow by 1.7% 2015, 1.8% in 2016 and 1.5% in 2017. The expected increases are above the estimated growth rate in potential output of 1.2% per year, aggregate capacity utilisation should, according to the Bundesbank's experts, rise markedly and considerably exceed the normal level by the end of the forecast horizon. This means that labour market reserves will be mobilised and wages will rise  strongly in the medium term.  

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Square positions mean less tense weekend...

It seems  too risky to keep open positions over the week end even if you have  the authority from your boss and  back office to so do!!!

The Greeks are rather sensitive and defiant.  They have decided that they need to keep the money with themselves. If  the outstanding sums are large, the deliberations have greater seriousness!

Merkel is looking for 'numbers' in the end.  The Germans are rather disappointed at having to dole out the Greeks.

The bond market seems rather volatile(volatility is probably where you make your money) but then the weekend is too long to have long positions. 

The European banks ranging from HSBC to Lloyds seem to leave lingering doubts in the insecure minds of the investor. 

The US economy sends out mixed signals. The IMF  pleads with US  not to raise the interest rates in the fall. But "if winter comes, can spring be far behind" ? The Fed has been considerate but would be driven by data and not IMF pleas.

So the FIIs have to leave the emerging economies some day,  soon and with the oil glut, Indonesia and Venezuela are examples of how the cookie crumbles. 

Australian stocks haemorrhaged, shedding $70 billion over the week in worries over the stalling domestic economy and that piled on  a global bond sell-off to hit local equities . It might take some time for the Aussies to restore confidence.



Without any risk or responsibility 




Wednesday, June 3, 2015

Growth without jobs?

Draghi on 6/3:

" the first quarter of 2015, real GDP in the euro area rose by 0.4%, quarter on quarter, after 0.3% in the last quarter of 2014. In recent quarters, domestic demand and, particularly, private consumption were the main drivers behind the ongoing recovery."


Unemployment statistics from Eurostat (April, 2015) .Data up to April 2015.


"The youth unemployment rate in the EU-28 was more than double the overall unemployment rate in 2013. At 23.4 %, more than one out of every five young persons in the labour force was not employed, but looking and available for a job. In the euro area, the youth unemployment rate was even higher at 24.0 %. The unemployment rate among young persons was higher than the rate for those aged between 25 and 74 in all Member States. In Greece (58.3 %), Spain (55.5 %), Croatia (49.7 %), Italy (40.0 %), Cyprus (38.9 %), Portugal (37.7 %) and Slovakia (33.7 %) youth unemployment rates were particularly high. Germany (7.9 %) and Austria (9.2 %) were the only Member States with a youth unemployment rate below 10 %."


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Current Issues In Monetary Policy : Kuroda raises deflation mindset and secular stagnation


"The first issue concerns the effects of unconventional monetary policy and its transmission channels." ("In October 2014, the Bank of Japan decided to expand quantitative and qualitative monetary easing (QQE). This policy decision aimed at maintaining the improving momentum of expectation formation and at pre-empting manifestation of a risk that the decline in the inflation rate, even though caused by the oil price decline, could delay conversion of the deflationary mindset, which had been progressing steadily under QQE.)"


"The second issue pertains to inflation expectations and the decline in crude oil prices."
"The third issue is how to deal with the international spillovers induced by the diverging directions of monetary policy among advanced economies. I"

"There have been wide-ranging interpretations and views on secular stagnation. In light of the discussions over slow post-financial crisis recoveries, I would like to raise three policy issues."


"The first issue is to what extent central banks should consider the impact on the supply side of the economy in conducting monetary policy."
"The second issue is with regard to what monetary policy tools are desirable under a low natural rate of interest."
"The third issue concerns the optimal policy mix for an economy undergoing medium- to long-term stagnation with a low natural rate of interest.  "


Haruhiko Kuroda Governor of the Bank of Japan  on June 4th 2015 


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Latest Europe Unemployment figures : Greece tops


Nestle! Hot potato? Or hot lead?



"Indians they have a lot of tolerance, they do not really bother about lead etc in food, given the pollution that we have. So, definitely a time to buy into Nestle because it is not going out off business yet," - A callous fund manager quoted in a newspaper report. . 


Shares in Nestle the company that makes Maggi noodles were sold off in India as Maggi noodles came up for scrutiny for excessive lead, mono-sodium glutamate or a taste enhancer. 



Nestle struggled today lower by more than 10 % consequent to an Indian provincial food and drug authority finding excessive lead content ('dangerously high') in its maggi noodles. 




Some ethics in management! Some corporate governance!

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OECD cuts growth rate

OECD revises growth downwards

Source: OECD


OECD sees global growth at 3.1% in 2015, rising to 3.8% in 2016. This is less than the 3.6% and 3.9% foreseen in the previous Outlook in November 2014, largely on account of the unexpected weakness seen in the first quarter of 2015. 

US GDP growth is projected to be 2.0% in 2015 and 2.8% in 2016, a downward revision from the November 2014 forecast of 3.1% this year and 3.0% in 2016. While the stronger dollar and adverse weather weighed on growth in early 2015, unemployment continues to fall. Supportive monetary policy and lower oil prices should continue boosting demand.

Output in the Euro area is expected to rise by 1.4% this year and 2.1% in 2016, more than forecasted in the previous Outlook, when the projections were 1.1% for 2015 and 1.7% for 2016.  

Japanese growth is projected at 0.7% in 2015 (compared with 0.8% in the previous Outlook) and 1.4% in 2016 (1.0% previously). Lower oil prices, stronger exports reflecting the weaker yen and real wage gains are among the factors driving the recovery.

In China, the 2015 GDP growth forecast has been revised down to 6.8%, from 7.1% in the November Outlook, and to 6.7% from 6.9% for 2016. The deceleration reflects the restructuring underway in the Chinese economy as services replace manufacturing and real estate investment as the main driver of growth.

Growth in India is expected to remain strong and stable in 2015 (at 7.3%) and 2016 (7.4%). 

Source: OECD  


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