Privatization of Public transport

Middle class points out that better service is advantage of privatization. I cannot disagree. Privatization comes with a cost, a cost that affects the poor more than the middle class.

Privatization can discontinue non-viable services to improve efficiency and be more profitable. This affects the poor as they do not have any other means for travel, unlike the middle class (and rich).

Privatization can increase cost of travel, those who can afford this cost justify it with increase in service quality. Now this cost is something middle class might consider value for money. But value for money for poor is not same as that of middle class; poor does not care about this service quality on an empty stomach.

Middle class is hypocritical in their views. Rich is not very amused when the air travel costs were reduced, they complained about lack of service quality in low cost airlines. They even complained that cost reduction increased number of flights and this is causing pollution. The same way middle class is complaining about poor.

A country which cares for its people should make sure that the services are directed towards the poor and not to the middle class and rich. Why are roads made only for cars and other motorized vehicles? Roads should be made more friendly to pedestrians and bicycle travel. Roads should be made friendly for handicapped, especially who cannot afford cars.

A country or government that focus on projecting the rich and middle class, without a focus on poor and their needs is inhumane. Chief ministers in some Indian states (example Naidu of Hyderabad) are celebrated by media (again middle class and rich) for development. What is development that is targeted towards middle class and rich, ignoring the poor.

In a developed country (read west), I advocate making public transport virtually free. Current high public transport costs are encouraging people to use private transport – adding to traffic woes, pollution and costly resources. Let private transport be enjoyed by the rich, and let them pay a very high cost of unequal-resource-usage. Till the time world cannot afford to have every citizen driving a car (reality – if everyone drives, there are no enough roads and no enough petrol and pollution will be too high) cars should be discouraged.

The story is same about all privatization steps. When you think about service quality, think about the people who cannot afford this increase in service quality.

Protectionism, Fascism, Nationalism are cousins

It is feared that world economy is moving to protectionism. This is shown by American fiscal stimulus bill provisions for buy American. I would like to equate this to Fascism or Nationalism and also explain why Nationalism will one day lead to regionalism and casteism and all kind of hate between people.

When you protect American interests you are caring people in one region distressing countries which are exporting to America or the country that is showing protectionism. This is very close to Nationalism that is shown for example fascists in India. This nationalist financial protectionsim is closer to the regionalist financial protectionism shown by MNS - regional nationalist Hindu party in Mumbai. (In Mumbai these parties wanted jobs to be reserved for locals)

This nationalism can easily mutate to the regionalism shown by MNS in Mumbai - Attacking Biharis from the poorer parts of India. Soon you will have one region turned against another, one caste turned against another. Once you detonate the nationalist bomb (hate, fear against a community/nationality), you will never have control over it.

People who support and confuse patriotism with Nationalism should realize that Nationalism can easily mutate into other dangerous cousins that will be very difficult to cure. If you see India now you will realize what will happen when you elect a fascist party like BJP to power. (I always avoided naming the party directly, but I think it is time that people talk about it as that party is not just another party)

America should stay away from protectionism, India should stay away from nationalism and regionalism its side effect.

American Blaming China For Currency Manipulation

America and West cannot blame others for the mess they are in.

Nixon removed Gold standard. You can only manipulate a fiat currency. America manipulates the market, its interest rates, reserve ratio, etc. How do you draw a line on which intervention is acceptable and which is not? America cannot define that - quoting Obama, World has changed.

Americans evidently lived beyond their means funded by Chinese. In a normal society we call a person with such huge deficit, dependant on money from his foe, an irresponsible person. He will be cast out of the society.

Are Chinese going to buy the American treasury bond in future? That will mean that Chinese are financing the American fiscal stimulus package.

Chinese should ask America for better say in American fiscal policy, considering it is Chinese people’s money that America is playing with. It is time world force America to control its spending.

US treasury secretary blaming China for currency manipulation-- Remember Nixon

American treasury secretary is blaming China for manipulating the currency. I suggest that he read the presidential archives kept in Washington to understand how China is able to do that. How can a country manipulate a real currency? Who removed Gold standard in the first place?

China does manipulate currency, America does manipulate markets and interest rates, we all do that. Who are you to define what is right and what is wrong? If there was a Gold standard, China would not have been able to manipulate, who is to blame for that?

Again you cannot keep blaming China for your deficit problem. You should learn to live within your means. China should respond by stop buying US treasury bonds and make America officially bankrupt. America is already bankrupt.

It is in Chinese interest that America stays on its feet so that it can pay back to China ;).

I do not understand the reasons why a $2trillion deficit country calling itself economic power. In normal society we call such people irresponsible and cast him out of the society. Strength of America is that the alternative is much worse.

I predict America will default soon. China, as unpredictable it is, may not buy the US treasury bonds and this will inevitably cause America to default and Dollar will crash. If you are long on Dollar, you get gambler status.

No amount of fiscal stimulus is going to work. Confidence is at its nadir. America is just increasing its deficit and risking a total collapse of its economy.

My comments are based on 10% data, and 90% sentiments/gut feeling. But that is the whole point, you do not need a lot of data, it all works on sentiments.

Capitalist economy and riding a Tiger

Living in Capitalist economy is like riding a tiger. You cannot get off from it without being eaten.

There is too much money in the economy, bank created money, fiat currency money. (The crisis world is facing is not about less money in market, but that people do not trust each other to lend. ) Without this organized banking fraud is not ended, economy will not stabilize.

if that money is taken out from the market, you cannot predict what will happen. There will be market crashes all over the world, industries will fail, etc. That is the right thing to do, unless you do not mind this big ponzi economic fraud that we are living in.

What is the right thing: There should be some standard for currency, gold, silver anything that is not easy to produce. Money creation by banks should be stopped. For a start increase cash reserve ratio step by step. Interest rates should be decided by the market.

Consequence: Economy will shrink when the money created by banks are taken out; shrink is a small word considering the ridiculous reserve ratios. Non productive industries will loose market.

I hope we can continue riding the tiger and let another generation solve the problem or get eaten.

Microsoft cutting 5000 jobs

This from a company that sits on huge cash reserves.

Why can't they invest people and fix windows software for once? Why can't they put more into R&D? Answer is they just do not care. I hope all those laid off can work to make Free Software better in their free time.

Economic criminals(Satyam's Raju), China's Tainted milk scandal

Seems like Raju is a thief.

With so much financial irregularities happening involving white-collared executives, how safe are the pension funds managed by companies?

Accused, I won't call them guilty as China's justice system is not open, in the tainted milk scandal is awarded death penalty. I agree it is too harsh, but what about the economic criminals? They are still enjoying their high salaries and probably bonus and safe with a golden parachute.

[ Pension funds managed by government agencies is fraud anyway. But most of the fraud there is because of inflation and pension funds not able to catch up with inflation without taking undue risk on the pension fund money. ]

[ Again, my point is that this kind of growth is not sustainable. There is no way out other than to let the world economy shrink, but as much as possible with a soft landing. ]

Alan Greenspan policies, Bailouts and Future inflation/Huge bubble

After the dot-com bubble, most people praised Alan Greenspan about the way he handled the economy by not letting things cool. He cut interest rates. Now everybody is blaming him for the mess that is created now.

Why don't people learn from mistakes, why create stimulus packages and bailouts that you are going to regret later. As a layman, I do not understand how the stimulus is going to work. If it works, it will end up postponing the crisis to a later date to a bigger crisis. If economy is in a mess, you need to solve, not postpone it.

How is America planning to solve the 2 trillion dollar deficit? Being the leading economy, if America fails, every one fails with it.

If bailouts are not going to work, what is going to work. What can be a solution which does not cause problems for so many people? Is there a way out?

I think pumping more money into this market is going to create a huge inflation sometime later. God knows what these wise economists have in mind to solve it. I could not find anything on how the extra money supply will be solved. How the central banks plan to suck the money from the market. Do you think they can suck it off the market?

ICICI best saving option for British

After Bank of England reduces interest rates, ICICI is the best savings option for the British.

ICICI gives 4.65 per cent for a 12 month bond. How does this affect ICICI? Will this positively / negatively impact ICICI stock in India?

Million dollar question - Economic crisis and Economic stimulus

They say that too much credit is what got us into this mess. How would more credit get us out of it ?

If answer is that economic stimulus will generate demand, etc, then why did economy fail when demand was so high? What is guarantee that it won't fall steeper than this time? 

IMHO there is any way out from a deep depression and correction of asset prices. If you try to artificially prop the economy, it will lead to a much bigger crisis.

What governments and wise economics should do is to ensure this foolishness is not allowed in the economy again. Take this opportunity to change the system, stop fiat currencies, make markets transparent and simple,  make companies more open, no more secrets. If you do not correct, people will correct it with a revolution as Marx promised.

Crony capitalism and Indian real estate

Why is government helping real estate companies hold prices high and continue to fleece the customers? Hope people see the irony, My tax money is used to support the rich real estate companies so that they can charge me higher prices. Same with the way RBI is forcing or helping banks restructure the loans taken by these companies, taking a risk on depositor's money, again consumer's money.

When asset prices have fallen around 40% around the world ( ET editorial), why it is not happening to Indian real estate? Why is government partial to an industry, unduly favoring their corrupt practices?

Favors to one company/sector/industry is Corruption. Crony capitalism is not fair.

Citi - Fall of a giant -Example of executive greed

Problems Citi face, as I read in articles, is because of the greed shown by its executives. Making profits and pocketing huge bonuses by excessive risk taking. If this is the best capitalism can give, I think we need more regulation not less regulation. I would like to know how less regulation can regulate this greed and living to the moment attitude shown by these executives.

The damage brought on the world by these criminals, that brought the financial industry down and along with lives of millions around the world, is higher than what Osama Laden could do to the world.

These capitalist criminals need to be punished.

I wonder how Citi split will affect Indian IT industry. How do I find which all Indian IT players are doing business with a company, for example Citi, and the percentage revenue coming from that client? Does IT companies publish these information to stock market?

It is time Vikram Pandit and other Citi executives be punished. There should be some accountability for these executives for the damage they did to the financial industry by their excessive risk taking. If these executives are not punished it will lead to moral hazard.

Financial auditing - Independent body

Financial auditing is done by the auditors who are directly hired by and paid by the company that is getting audited. This is creating a conflict of interest.

Financial auditing for public companies should be done by a common industry body. There should not be direct payment from the company to the auditor. Every public company should contribute a fixed sum, based on their revenue, to this common body and they appoint an auditor for the company making sure that the auditor changes every 2 years.

The problem with this is there will not be a competition in the auditing business. Companies directly paying for the auditor seems to me like a potential thief appointing police to check himself.

Communism - Cost of Labor

Labor cost - The worker's labor-power is, under capitalism, a commodity, which can be bought and sold. When the capitalist hires the worker, the capitalist pays not for a certain labor but rather for the worker's labor-power

In Capitalism the amount of money paid to a worker has nothing to do with how much value/money he produces. Salary/Labor-cost is dependent on availability of labor, there will always be an excess supply of labor in the market and consequently salary will be low. You and me are paid salaries disproportionate to the billing cost.

Marx argued that the wage - the price of the labor-power - should reflect the price of the commodity produced when sold on the market

Communism - for the ignorant - keep your mind open and try to understand what Marxism is. While reading do not look at the stereotype communist that is created in your mind by the Capitalist media.

"Pure communism" in the Marxian sense refers to a classless, stateless and oppression-free society where decisions on what to produce and what policies to pursue are made democratically, allowing every member of society to participate in the decision-making process in both the political and economic spheres of life.

Rama Raju and Jesus Christ

The way press is handling Raju's jail term reminds me of how Jesus Christ was handled after he was arrested.
The roman governor, Pontius Pilate, after Jesus arrest made his soldiers beat up and insult Jesus so that people will feel sympathy and not ask for his death.
The same way press is leaking news about the jail and how Raju has to spend days with rapits, murderers etc. In my view what Raju did is comparable and he deserve that. Media should start writing about how fraud committed by Raju is affecting people and run a series on people who lost everything and mental tension people are going through.
Raju should never come out of jail ever for what he did. Anything less will be denial of justice.

25 crore fine for 8000 crore fraud - great deterrent

As per ET, maximum fine that Raju can get is 25 crore. In addition to this the paper states that he can avoid prison by turning approver. What shit !!!.
A poor thief gets much bigger sentence. This criminal has spoiled life of so many invsetors and mental pressure to so many employees. His risk taking could lead to lot 50K employees loosing their jobs. Punishment for financial crime should be mandatory prison sentence if proven guilty of direct knowledge of fraud, irrespective of profiting from it.
I don't buy Rajus statement that he did not profit from the highe stock price. As HT pointed out, he used the higher stock prices to get leverage for his other business (greedy) ventures. He did profit.
I empathize with Raju and his current state of affairs. I can understand that he is going through hell now. But he deserves most severe punishment for what he did. Given Indian sentiments to big people, I won;t be surprised if Raju turns politician :). He will be an asset to any political party ;).

The Satyam affair - No whistle blowers?

I cannot believe (i dont think anybody) that Raju could do a fraud of arnd 7K crore and cover it all this while without help of directors and executives. Company CFO, Presidents and all CxOs should be held accountable. I am surprised that these executives did not have enough integrity to blow the whistle.
Pricewater coopers should be investigated and punished/banned with employees involved held responsible for auditing.
I hate people who think they are better than everybody else (the brahminical attitude) just because they received a better education. Satyam Directors who received high remuneration should be answerable to the retail(and other) investors who lost money.
I am sure that this is just the beginning of more financial fraud coming out. Let Satyam punishment be a warning to executives in other firms that they can be held accountable.

Freemarket nurture unregulated greed, prosper on it and .....

Freemarket cannot survive without greed, it encourages greed. Irony is that it collapses when greed makes the market so fat that it cannot stand on its feet.
Regulations will not solve the problem, monitoring cannot be effective. Markets should be simplified and middle men (and suits) should not profit doing nothing

Author's market outlook for 2009 ;)

If somebody believes this bull run is going to last, I am sure you will lose your money. No economic stimulus can revive the economy now. It will take much more effort than this.
Siju's market outlook for 2009 ;) (mine is as good as any expert, nobody really knows)
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Sensex will touch 6K before it rises again to 8K some time in 2010. If you think you can put money in options market, it won't work as you can never time the idiocy of the market.
If you are a good with reading emotions of the market, you can make some money riding the tide. Market will fluctuate between 8K and 10K for some time before crashing to 6K. ( I know market is trading at 10291 now above my upper limit, it is time to sell all you have and wait for 9K again :))
My prediction about market is as good as any financial expert. Nobody really knows how the market will behave ;).
Disclaimer: My market predictions are not based on any real data or knowledge from any (real) financial expert or markets. It's based purely on my gut feeling. If anybody wastes money based on this prediction, author is in no way responsible for it.
Isn't it so simple to tell all crap and put a disclaimer?
What is your expert prediction for markets in 2009? :)

Front running customer order - Another fin malpractice learned

This is an illegal practice by stock brokers that I learned about today. This is robbery and there are so many cheating options available with complex financial instruments available.
http://en.wikipedia.org/wiki/Front_running
I think financial markets should be shutdown except for Commodities market and probably commodities futures with tight restriction to allow only hedgers. Speculators should be banned.
Credit derivatives should definitely get banned. I don't think rating agencies can do a good job other than to create employment for themselves. Again I am not an expert, but I would like to know opinions from experienced economic expert as to why they think credit derivatives (or most derivatives) are useful for general economy.
Let these people learn to make money honestly.