NSWORLD

This is the one question that crops up in everyone’s mind, whenever we read reports such as, Rs. appreciating, US Dollar falling down, everywhere.

In a very simple language ,we can say that Demand and supply determines the value of any currency against any other currency. Suppose the demand for Rupee is higher owing to excess supply of dollar (i.e. more number of people want to convert their dollar in to Rupee), value of dollar will naturally decline against Rupee. This is the fundamental principle of Demand and Supply driven Exchange rate.

Not every nation on the earth follows the system of Demand and supply for determining the exchange rate. Some have pegged the value of their currency against others (like china) and some follow the route of `Free float` and intervention (by central bank) now and then whenever required (like India).

 `Gold Standard`It was the earliest method used  for determining the value of a currency… Under the gold standard, currency issuers guarantee to redeem notes, upon demand, in that amount of gold. Governments that employ such a fixed unit of account, and which will redeem their notes to other governments in gold, share a fixed-currency relationship.This system avoids frivolous printing of currency and keeps the inflation under check. With expanding trade beyond geographies and transactions taking place across nations, this system of Gold standard was ill equipped to address the concerns and complexities of the new changing and dynamic world order. 

Bretton Woods SystemThis new order came in to exisistence in 1944. Preparing to rebuild the international economic system as World War II was still raging, 730 delegates from all 44 Allied nations gathered at the Mount Washington Hotel in Bretton Woods, for the United Nations Monetary and Financial Conference. The delegates deliberated upon and signed the Bretton Woods Agreements during the first three weeks of July 1944.Here the participating countries agreed to fix the value of their currencies with in the fixed value (i.e. plus or minus some percentage in terms of gold) and it was also agreed that IMF would help those nations in case of serious problems in Balance of Payments.But this system also collapsed in 70s when US unilaterally decided to move out of this system and refused to convert the dollar into gold.

 Demand and Supply This is the simple and most effective method to determine the value of currency which is used almost everywhere worldwide. (With some exceptions and modifications)This is also popularly called as free float system, where the market forces are given a free hand to determine the value of any currency based on Demand and supply for respective currencies. Today in India we follow a middle path that is in-between free hand to market forces and occasional intervention by central banker. Still we have very long way to go so that our exchange rate is completely determined by market forces. , For that various other regulatory issues including `Capital account convertibility `have to be sorted out. Then what are the advantages or disadvantages of opting for `no intervention policy by government` is another topic for debate and we will discuss some time later…

I think the entire theme for the month of June was , money , money and more money everywhere. First it started with entire National Media highlighting the takeover of substantial stake in Deccan Airways by flambuyont businessman Mallya. Then everywhere there was the news of two major public issues, one IPO and another FPO by DLF and ICICI Bank respectively which together runs into some thousand crores of Rupees.This month also saw the hot debate over  recently released film `Sivaji` ,the money spent on it and the remuneration paid to Mr. Rajanikanth.

Suddenly I am feeling `Oh am fed up yaar`. So much `money` news around and discussion on  hundreds and thousands of crores. (Let me be honest I may take little too longer to figure out exact zeros to be put in these figures)

All these news bytes and regular corporate news which involves buyouts, private equity investments here and there makes at least a particular section of Indian society to believe that everything is great about India and we Indians are happy and rocking.

But is this true????_______ NO !!!!!

Not so representative ,Stock market indicies, GDP figures, and Whole sale  Price Index numbers can never tell you the real story of majority of People especially for a country like India which is so vast and heterogeneous.

Still we have millions of people living below `Poverty Line`,millions suffering from malnutrition, millions without proper housing, sanitation, potable water, millions waiting for that elusive job, and still many more millions of farmers waiting for rain god and thinking of there overburdened debt to be repaid.

You need not be an Economist or a Statistician to sense this. Just step out of your metro (or State capital) and enter any semi urban (tier II city) or rural area, you will notice that lopsided development, imbalance. Greatest theory in Economics, `The Trickle down effect` is not at all working for these poor chaps. Why it is not working?? Because they don`t have proper connectivity, and infrastructure to attract big investments to their part of the world . Who will create this condusive atmosphere so that some trickle down happens there also??? Definitely it is the responsiblity of the state.

It is high time that our policy makers should think of Inclusive growth and revisit their Urban centric policies.

Brand and Branding has got into our nerves. In today’s world of hectic and cut throat competition, you can`t live without Brand and Branding.

There is a Brand for everything we wear from socks to Hair gel, we use. Sometimes the environment we live and the peer pressure forces us to go for everything branded. What is the one particular aspect that forces us to go for a particular brand? Quality, Reliability, or any other thing more than that?

If we analyse the whole phenomenon of `Brand`, key aspect we can observe is that, everything is played around a small thing called ` Human Ego`. `I want to be different`, `I want to be recognised, appreciated`are the simple and most common `Human Egos`, which Brand Builders exploit.

Another simple question is, When a particular product/service can be called as a superior Brand?  Answer is, when a product/service is superior in quality, reliable, costly and not easily reachable to each and every person desirous of having it. Then only it can satisfy the `ego` of select privileged people , who flaunt it before `have nots`. And this is also the simple `funda` of building a Brand.

Another hard reality of life is also that, we need to create a brand for ourselves so that our objective/goal in life is achieved. How do we do it? Just follow the strategy adopted for product/service brand building? i.e. `cashing on ego`? or it should be a different one?

Definitely we should not follow the strategy of `cash on ego` when we are in the process of building brand for ourselves. Instead it should be based on the broad principles such as strength, courage, self-reliance, simplicity, harmony and our aim should be to create such a brand for ourselves which is perfectly in sync with our noble Upanishadic concept of `Vasudaiva Kutumbakam`.(The whole world is mine and everybody living here belong to one big family) Then only it can be a successful brand such as ,Vivekananda, Ramakrishna paramahansa, Mahatma Gandhi, Nelson Mandela, to mention a few.

  It was 12.05 in the dusty afternoon of a hot summer. The Compartment of ,12.00 noon, Mysore-Bangalore Express, in which i was seated, was sparcely populated and resembling a microwave oven. Though the scheduled departure was 12.00 noon, the Train somehow was reluctant to leave calm and serene station of Mysore.

At 12.10 it started slowly moving. Suddenly two girls ,seemingly, in their early 20s came running and entered the compartment and sat infront my seat with a sigh of relief. As soon as the Train started moving cool breeze started reducing the inside compartment temperature.

I was immersed in a well researched article on SEZs in Business World.Few minutes later when I moved my head out of magazine I found them conversing. Yes they were talking to each other! “Whats great deal in that?” you may ask.

Yes there is, they were communicating using `Sign` language. I was taken aback for moment.Then I could observe, both of them wearing small and sophisticated `Hearing aids`.

They went on talking, talking, using sign language. They were laughing, at times disagreeing with each others` point of view. I could sense their feelings but not their language. It seemed to me that they didn`t have any barriers of communication.They were so immersed in their conversation that they had conveniently forgotten the presence of a stranger sitting just infront.

Suddenly one of the beautiful girls took out a Stardust magazine from her bag and started showing a photograph of Shahruk Khan to her friend. Then they went on exchanging their thoughts on each and every article and photo in that magazine. They seemed enjoying each and every bit of information  in that magazine.

“What they would have felt, if they were able to hear the melodious songs and dialogues of the movies they liked?” suddenly this question flashed in my mind. But they seemed least bothered about that. Both of them had Mobile phones and messaging was their easiest mode of communication.They were exchanging their messages and showing each other those special and funny messages they received from their near and dear ones.

With everything at our disposal, still every day and night we think and worry about the things and facilities we don`t have and keep on postponing our happiness. Suddenly these two happy and fiercely independent beautiful girls looked like Swans floating over the calm waves of Ganga, least bothered of the things and facilities they don`t have in their life and making most out of the gifts bestowed upon them.

Back Home I still feel that , I was not able to strike a conversation with them, and in their world of Happiness and Joy and I was the one Handicaped Person!!

Aftermath of the Percy Mistry (former world bank economist) committee report, `Mumbai as an IFC `debate has started again. It was Finance minister P Chidambaram who first mooted this idea in his 2005 budget, but since then this idea has taken new dimensions and come a long way.

What is an IFC? `International Financial Centre` means , includes and provides a `one stop shop` for all the Financial Services needs of big corporates. When I say Financial Services for large corporates it includes , services ranging from Due delligence, Accounting, Legal, Private placements, Investment Banking,Leveraged Buy Out assistance,Fund rising, sorts of services required by corporates when they go for Mergers and Acquisitions overseas.

What is the Status Quo? Due to various regulatory bottlenecks such as ,No scope for full capital account convertibility, (100% Capital account convertibility allows any one to freely move from local currency to foreign currency and back) Absence of regulatory `go ahead` for forex futures market, Large stakes of government in big Financial corporations, and excess intervention of Central banks in Money and Forex markets, etc are few of the reasons that are discouraging Globally big Financial Service providers from opening their shops in India in general and Mumbai in specific and they prefer places like Singapore, London, Newyork.

What is the Loss? A booming Indian Economy is encouraging more and more number of domestic corporates to take the route of international mergers and acquisitions, this is creating more and more demand for `International Financial services` such as Fund rising in the form of debt or equity, private placements. And also services such as Legal , due delligence and accounting . In 2005 Indian companies paid a whopping $13 billion in the form of commissions to these financial intermediaries for their services and it went to intermediaries situated in Singapore, London and Newyork. Recently Tata steel completed its LBO (Leveraged Buy Out ) of Corus for $12.9 billion and imagine the service charge paid by the company for intermediaries.(just take 1.5%of the total value)Like this when our economy is growing at 9% what will be our demand for `International Financial Services` in the years to come and how much we end up paying?

What is the solution? If the regulatory environment is condusive many of the leading `International Financial Service` providers set up their shops in India itself and we can ensure that the amount spent by the corporates for these services remain in India and it inturn creates employment  , and has some trickle down effect also.

ಐಶ್ವರ್ಯ ಹಾಗು ಅಭಿಷೇಕ್  ಮದುವೆ ಅಂತೆ, ವಾಲಗದವರಿಗೆ ಇಷ್ಟ್ತುಕೊಟ್ಟಿದಾರಂತೆ, ಹೂವಿಗೆ ಇಷ್ಟ್ತು ಖರ್ಚು ಆಯ್ತಂತೆ, ಸೀರೆ ಅಲ್ಲಿ ತೊಗೊಂಡರಂತೆ, ಅವಳು ವಜ್ರದ ಒಡವೆ ಹಾಕುತ್ತಾಳಂತೆ. ಅಭಿಷೇಕ್,ಶೇವಿಂಗ್, ಮಾಡುತ್ತಾನ?  ಆಮಂತ್ರಣ ಪತ್ರಿಕೆ, ೧೫ ಪುಟಾನ ಅಥವಾ ೧೬ ಪುಟಾನ? ಅಮರ್  ಸಿಂಗ್, ಯಾವ ಡ್ರೆಸ್, ಹಾಕುತ್ತಾನೆ?  ಮುಲಾಯಂ ಧಾರೆ ಗೆ ಬರುತ್ತಾನ ಅಥವಾ ವರಪೂಜೆಗ?  ಯಾರನ್ನ ಕರೆದಿದಾರೆ ಯಾರುನ್ನ ಕರೆದಿಲ್ಲಾ?

ಆಯ್ಯಯ್ಯೊ, ಹತ್ತು ದಿವಸಗಳಿಂದ ಈ ಮೀಡಿಯಾದವರು ಇದೇ ವಿಚಾರ ಚರ್ಚೆ ಮಾಡಿ ಮಾಡಿ ತಲೆ ಕೆರೆದುಕೊಳ್ಳೊ ಹಾಗೆ ಮಾಡಿದಾರಲ್ರಿ..

ಇವರಿಗೆನು ಬೇರೆ ವಿಚಾರ ಹೊಳಿತಿಲ್ಲವಾ? ಪ್ರಪಂಚದಲ್ಲಿ ಎಲ್ಲೂ ಆಗದೇರದು ಏನಾದ್ರು ಆಗುತ್ತಾ ಇದೆಯ? ಅಥವಾ All are equal but some are more equal ತರನಾ?

ಇನ್ನೊಂದು ವಿಷಯ ಗೊತ್ತಾ? ಈಗಾಗಲೆ ಈ star couple ಅನೇಕ products ಗಳನ್ನ endorse ಮಾಡಲಿ ಅಂತ ಸಾಕಷ್ಟ್ತು, Ad.Agency ನವರೆಲ್ಲಾ ಮದುವೆ ಆಗೊದೆ ಕಾಯುತ್ತ ಇದಾರಂತೆ. ” ಜನ ಮರುಳೊ, ಜಾತ್ರೆ ಮರುಳೊ..” ಅಂತಾರಲ್ಲ ಹಾಗೆ. ನೀವೇನಂತೀರಾ?

Media is in full swing on the story of “Prince Williams and Kate, Split”. “The Sun”, which broke the news, says that a five year old relationship has come to an end. It has already given it the colour of  “Army first Girl friend next”.

Private affairs of celebrities/Royal families have always been the favourite topic of Paparazzi and Tabloids mostly in Western world.

Frequently “Breaking and Making of relationships” is not only the story of Western Civilization, but of late we are observing this phenomenon in our own back yard.

Why Relationships these days are not strong, stable and long lasting or Is `Ad hocism` is the favourite flavour of the today`s generation? 

Partly we can blame it on the chaotic and confusing environment prevailing in Liberlised and Globalised World of today, where Standard of Living takes the first seat and the Standard of Life takes back seat.

Media`s Overglorification and Tracking of each and every movement of Celebrities is also sending wrong signals to the youth who are struggling to arrive at clarity of thought with respect to what is right or wrong.

Last week a Radio Station of the city ran a programme , in which listeners were asked to respond to a question  as to , What would they gift to their Ex Boy friend/Girl friend in their marriage. Most of the callers to the Radio Station had Bad wishes/ gifts for their Exs.

What can we interpret from this, Should we appreciate the `Life goes on` attitude of Youth or Have we forgotten the famous lines of Mohd. Rafi, Yeh, Dua hai meri Kush raho Tum Sada Ke Liye?

Isn`t it funny? What the length of a skirt has got to do with , the movement of a stock market index? Yes there is a correlation , says Ralph Rotnem, a Harvard graduate and the propounder of Hemline theory/indicator.
Hemline theory is a sort of study of social mood and behaviour and an effort to link that to stock market movement. According to Ralph, when people become affluent and mood is upbeat in the society length of skirt decreases, this he connects with stock market performance and has found that even stock markets perform well at that time. He links both of these to Liquidity phenomenon.
Seems to be an interesting theory and observation. Just like stock/index, skirt length also has a support and Ressistance level and reaching of upper or lower limit implies concurrance of an extreme positive or negative mood.
But can we use it in India where we don`t have an uniformity in dressing across our vast geography?
Heel length Indicator:Suppose if i want to create another indicator called Heel length Indicator and test whether there is any correlation between this and stock market returns, then what i will do? Simple i will collect the numbers of the average length of heels of foot-wears sold by top Foot wear companies and quantity in different quarters and juxtapose it with stock market returns of respective quarters. Then i will find the correlation i.e, Beta and write my observations, that’s it.
Believe me, am not a Harvard Graduate!!!!

Writer, Photographer, Bird watcher, Agriculturist, Publisher and what else you can expect from a person, to call him Versatile, Dyanamic, Genius? All this and many more was KP Purna chandra Tejaswi son of `Rastra Kavi`Kuvempu.

A post graduate in Kannada literature, but opted to be an Agriculturist and preferred to lead a life in seclusion, and thus settled in his Moodigere coffee estate.(Chikmagalore dist.) Reflection of his surroundings and his day to day interaction with nature can be found in his literature.

Though he was living in a corner of the world, in his sprawling 25 acre estate `Niruttara` ,far away from the buzz of modern world, he was never closed to Modern ideas, Development, and Technology. His Millennium series is a testimony to this fact. A man of simplicity and a Socialist to the core.

Another interesting facet of his personality was that, he was a good cook also. This was revealed by his wife just a day before his sad demise, in an interview to Mysuru Akashavani (Programme : Navilugari).

Some interesting titles/observations made by media in honour of this great person.

Vijaya Karnataka: `Purna chandira raja haakida`

Thatskannada.com: K P Purna chandra Tejaswi a master piece of Kuvempu.

Yet again RBI has increased the CRR by another 50 basis points and Repo by 25 basis points. Now CRR and Repo rates stand at 6.5% and 7.75% respectively. This is the third time since Jan 2007 , RBI has done this in its continued  battle against rising inflation.

This write up is an effort to simplify the concepts like CRR and Repo and explain their impact on inflation and liquidity.

CRR-Cash Reserve Ratio- It is the portion of cash balance that every bank has to keep with RBI and it is calculated every fortnight. It is simple! more the CRR, more the cash to be deposited with RBI and inturn it reduces the lendable cash balance of Banks and reduces the supply of money in market. Thus it is used as a weapon to reduce inflation.

Repo-Repurchase agreement- In simple language Repo is referred as Selling to buy and Reverse repo is the inverse of that. Here RBI sells the govt. securities, to Banks at certain rate and after the stipulated period it buys back them paying , a price which is over and above what it received.  For example if the RBI sells the security at Rs.100 and buys back them after, say 1 year at Rs. 110, then Rs. 10 is the interest paid by RBI for the amount it received while selling the security. And this is called as Repo rate. When RBI increases the Repo rate Banks will park more money in govt. securities to earn more interest and this will again reduces their lendable balance and hence the liquidity in the market is reduced and inflation curbed.