Thought for the day
“You have to take risks. We will only understand the miracle of
life fully when we allow the unexpected to happen.”
-
Paulo Coelho
(Brazilian, 1947 - )
Word for the day
Ambulant (adj)
Moving from place to place. Itinerant.
(Source: Dictionary.com)
Teaser for the day
With US assiduously avoiding any direct intervention in
international conflicts in past couple of years, and Russia gaining
tremendously from spike in energy prices – who will lead the joint action in
Iraq, should a need arise?
Bulls’ resolve tested
The raging bulls in Indian equity and currency markets faced
their first serious test last week. Various local and global events tested the
resolve of bulls who are having a free run for past one month.
Globally, strife in Iraq sent energy prices soaring, as
global leadership continued to dither over a clear stance on military
intervention. The situation in Ukraine remained fragile.
Back home, IMD forecasted a 7% deficient monsoon. Heat wave
across north and northwest India led to serious power crisis. Reports suggest
that the crisis may worsen as coal inventory at many plants is below critical
level. Unusual rains and hailstorm damaged the onion crop in Maharashtra again,
threatening the consumer price inflation. Mumbai coast was deluged by a high
tide making people nostalgic about July 2005 flash floods.
On supporting side, IIP data for April brought some cheers
to the market. Morale of the bulls was also supported by the government’s
effort to accelerate the decision making process by removing many redundancies.
The vision statement of the government as articulated in the President’s
address to the joint session of the Parliament and subsequent very assuring
reply of the Prime Minister to the debate on that address were largely accepted
as harbingers of the good times.
The first round has apparently gone to the bulls, as the
sharp falls in prices has largely been lapped as opportunity. So far there are
no signs of panic in bull camps. Over weekend, the Finance Secretary Arvind
Mayaram has also attempted to reassure markets that as yet there is no need to
panic over Iraq. The markets ended the week with about half a percent loss over
past week; though the losses were about 2percent from intraweek highs.
I also believe that Iraq situation has the potential to
evolve into a larger conflict in the region, if the militant forces are not
curbed immediately. The success of Islamic militia in Iraq could encourage the
defeated militant groups in the Middle East Asia, South Asia and North Africa
region.
The attitude of US administration and many western European
nations towards the events in Syria, Ukraine and Iraq, in my view, has exposed
the weakest part of the global economy, viz., lack of credible strategic
leadership that has been the hallmark of global economy in past 150years.
Britain and US have invariably taken lead in resolution of most global
conflicts since later half of the 19th century. This assumption of
strategic leadership has made their economic and financial acceptable to the
other relevant forces in the world.
Britain has been losing their leadership status since Tony
Blair era. The economic decline of UK has coincided with it. London has lost
substantial share in global financial business to new centers like Dubai and
Singapore. The argument that only favorable taxation regime is responsible for
this shift is not acceptable to me. I would give first priority to the
perceived safety when it comes to my wealth.
I would watch keenly for
next decade how US losses or retains its strategic leadership over the world.
For now, Barack Obama is not making much effort.
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