Crash-landing the Indian Economy
The stock market may be on a roll but dark clouds loom over the economy. And that is not because of policy paralysis. It is actually ill-informed and poor policy making decision.
Puja Mehra points to hastily thought-out and implemented policies, such as demonetization (whose full consequences are still unfolding) and GST (whose roll out has been hampered by a complicated and sub-optimal design).
Keynesian Economics and the fallacy of boosting growth by destroying wealth
According to Keynesians, what drives the economy is consumption, and it’s the role of government to either consume directly or to give money to people so they will spend it.
Dan Mitchell debunks Keynesian economics in a humorous fashion. He points out that investment and production are the real keys to growth. Increased consumption is a result of growth, not the cause of growth.
What you pay for when you pay for fuel
When Modi came to power, the global price of the Indian basket of crude oil was $108.05/barrel. Back then, 1 litre of petrol cost Rs 80 in Mumbai. Three years later, on September 14, 2017, the price stood at $54.56/barrel. The price of petrol in this city stays almost the same.
Vivek Kaul says that there can be many justifications for high fuel prices. But the bottomline is that you are paying for the government’s excesses.
Kaleidoscope Thinking: How to think faster and more clearly
In a very engaging fashion, Taylor Pearson writes about cargo culting and Charlie Munger explaining what it’s like to have an effective latticework. He narrows down to two essential components to forming an effective latticework that lets you think faster and more clearly. He prods the reader to imagine a latticework like the prism of a kaleidoscope. All in all, an interesting read.
JP Morgan’s team on the Indian stock market
In an interview to CNBC-TV18, Kalpana Morparia, CEO-South and South East Asia, speaks of a “wall of liquidity” and hopes that “we are probably seeing the first weak signs of a private investment cycle pickup”.
Bharat Iyer, Head of India Equity Research, and Sajjid Chinoy, Chief India Economist, also share their views.
Watch the video or read the transcript.
The looming unemployment problem
India is set to see a further 30-40% reduction of jobs in the manufacturing sector compared with last year, according to TeamLease Services Ltd., one of the country’s biggest recruitment firms. This survey seems more bleak that "normal" but the rapidly expanding workforce is turning out to be a problem in an economy that is slowing down.
What passive buying and selling in the U.S. means for individual stocks
In what’s emerging as a nascent line of market research across Wall Street, investors are attempting to puzzle out how passive investing creates opportunities—or pitfalls—for individual stock trading. They are looking at factors such as the percentage of a stock owned by index funds and money flows into and out of such funds as they size up whether to buy or sell shares of a company.
