"Every social injustice is not only cruel, but it is economic
waste."
—William Feather (American, 1889-1981)
Word
for the day
Venial (adj)
Excusable; trifling; minor: a venial error; a venial offense.
Malice
towards none
Does a brilliant performer
in any field really need a medal or award for recognition?
First random thought this morning
Being traumatized by frequent call drops at my home, I reluctantly
decided to take few steps back and apply for a MTNL fixed line basic telephone.
And it was just a beginning of massive surprise.
I applied by filling a simple online form (no documents and no
fees). Within 24hrs two executives of MTNL were at my doorsteps, very humbly
requesting for an address proof, ID, photograph and Rs. 500 as fee. They
insisted that I just sign the form they had brought and they will fill it up
themselves from my address and ID documents. Within 48hrs my telephone was
ringing and I was free from the agony of frequent call drops!
No black swans here
The skeptics are taking it for an
academic hypothesis; ruling out any action in the near future.
The market participants are
divided in their opinion. In my view, this division will likely keep market in
its current state of indecision till 21-22nd September when FOMC meets next
decides on the Fed policy rates. It is entirely possible that we see some sell
off in couple of days prior to the decision day.
In my extremely parochial
understanding of the global economics, regardless of a token hike here and
there, I find it hard to see any case for any material hike in interest rates
even in 2017.
In fact, the case appears to be
that even a token hike might have to be supported by adequate monetary easing
to support the feeble economic momentum that we see in the USA.
Therefore, I am not at all worried
about a 25bps rate hike (not my base case) on 22nd September. What I am worried
about is the ponzi in the bond market, that has already assumed alarming
proportions and burgeoning by the minute.
To quote a recent post of David
Stockman:
"...the
global bond market has become a giant volcano of uncollectible capital gains.
For example, long-term German bunds issued four years ago are now trading at
200% of par.
Yet even
if the financial system of the world somehow survives the current mayhem, the
German government will never pay back more than 100 cents on the dollar.
What
that means is there will eventually be a multi-trillion dollar bond implosion
as speculators and bond fund managers alike scramble to cash-in their capital
gains at the first sign that the global bond markets are breaking and heading
back to par or below. And it is not just the “winners” who will be stampeding
for the exists." (for full post see here)
In my view, everyone knows the
endgame. It's going to be a disaster of mega proportion for the savers,
pensioners, investors, global financial markets, governments and anybody else
one could name. Therefore, this event, whenever it occurs will not qualify to
be a black swan event.
The winner would be the one, who
could see the first signs of the beginning of the end. I am yet to read or hear
any intelligent ideas on this topic; though billions of reams of papers and
terabytes of virtual data has been consumed on the related guesswork.
Now when everyone is doing it, why
can't I. So let me try it in next few days.
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