"I don't write a quick
draft and then revise; instead, I work slowly page by page, revising and
polishing."
—Dean Koontz (American,
1945—)
Word for the day
Tourbillion (n)
A whirlwind or something
resembling a whirlwind.
Malice towards none
After
BJP made a Punjabi CM of Haryana, the Congress Party appoints a Punjabi as UP
PCC President.
Will
this become a trend, ending the caste based politics, or these two just
isolated instances?
First random thought this morning
After Uttrakhand now comes Arunachal Pradesh!
Nabam Tuki might not enjoy majority in the house and the State may
head for fresh elections soon. To that extent SC verdict may not change much in
the State.
However, in terms of enunciating principles for (mis) use of
Article 356, powers of the governor, and constitutional validity of the
legislative work done by a duly elected assembly, under the leadership of a CM
(or PM) whose appointment to the office is later declared invalid by the court
- this judgment could be a landmark, in addition to the S. R. Bomai judgment.
Birdwatch
The clan of birdwatchers who claim to have spotted Black Swans on
the horizon is growing by the day. From the "prospects of Grexit" to
"vote for Brexit" a host of experts have sounded alarm bells - loud
and louder - to join the clan.
There is little doubt that the non-conventional monetary policies
followed by large central bankers, and consequent rise in political and
geo-political tensions, have prepared created a bounteous breeding ground for
the Black Swans to come flocking. However, the heard of birdwatchers eagerly
waiting for them is so huge and cacophonous, that expecting them to take the
bait sounds almost ridiculous.
In simple terms -
I fully appreciate the concerns of the experts and agree with them
that the global economy is stuck in a gridlock and it is not possible to
accelerate the growth in any meaningful measure from the current level.
I also completely agree that the current trend in the monetary
policy being pursued by the likes of ECB, BoJ, PoBC et. al. is mostly
irreversible.
I share their concerns for the poor savers who are primary victims
of the financial repression being perpetrated by the central bankers, in
concurrence with their political masters.
Where I differ is that - I do not believe that the events like
Brexit; unlimited money printing by ECB, BoJ etc.; tension in South China Sea;
shenanigans of North Korean premier; rate hike by US Federal Reserve; ISIS
gruesome attacks on civilian targets; Donald Trump getting elected as the next
US President; some Italian and Chinese Banks taking the Lehman route to
salvation; have the potential to cause the market collapse of the proportion
seen in 2008-09.
I strongly feel that all these conditions (in my view these do not
qualify to be termed as "problems") have been mostly created by the politicians
and not an outcome of independent market dynamics. The solution to these
problem therefore has to be political. Mere correction in asset prices will be
of no help.
With a ridiculous volume of bonds yielding negative return, gold
& silver having risen over 25%, so called safe haven currencies (USD, CHF,
JPY) having seen material inflows, it may not be easy to decipher what is
"risk-off" and what is "risk-on" trade in the current
circumstances.
In my view therefore any collapse in not imminent.
This might raise two questions -
(a) If not these what could
cause a collapse in the global financial system; and
(b) What should an investor
be doing this morning - Buy, Sell or Hold?
I will try to answer these questions in my dummy ways tomorrow.
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