"Too many people spend money they haven't earned to buy things they
don't want to impress people they don't like."
— Will Rogers (American, 1879-1935)
Word
for the day
Circumspect (adj)
Watchful and discreet; cautious; prudent, e.g., circumspect behavior.
Malice
towards none
Mahatma Gandhi shows his
power to the ungrateful nation.
He takes a break of three
days o change his attire and all the detractors are on their knees.
First random thought this morning
In his victory speech, Donald Trump looked nothing like the Trump
who was engaged in a long bitter, filthy presidential campaign.
He struck all the reconciliatory notes to sooth the nerves of dissenting
republicans and opposing democrats.
The economic, financial and market commentators should soon come
around and dilute their prophecies of an impending disaster.
Cashless in Great Mall of India
Past two days so much has
happened. First on Tuesday evening PM Modi struck hard on the black money
abolishing about 85% of the currency notes in circulation (in value terms). Then
on Wednesday, Republican Donald Trump trounced the Democrat Hillary Clinton, to
shock the poll pundits. Republicans also secured majority in both the houses of
the US Parliament, making Trump one of the strongest presidents in recent
decades.
I must admit that I am too lazy
to call Trump's triumph and Modi's strike on black money earth shattering
events requiring a major change in my position. Nonetheless it does
necessitates blinking eyes few more times and perhaps changing the side.
First of all, let me tell you
that I am stranded cashless in the Great Mall of India; and trust me I am not
alone. There are millions like me - wandering around aimless with no money in
pocket. My banker informed me that wait for three days and we will provide you
with crisp new notes and things would be perfectly normal. However, when I
tried to pass this message on to some of my acquaintances, I was ridiculed like
never before. The angry voices told me that —
·
Large traders are left with virtually no working
capital. The visibility of recovery of goods sold on credit is seriously
clouded, as the buyers are already invoking force majure.
·
Consumers are also struggling to dispose off
high denomination notes (HDNs) they have been holding to spend in near term.
Many of them do not want to deposit the papers in banks for the fear of
persecution by tax authorities, whom they refused to oblige by declaring in
IDS.
·
Most small contractors are busy reworking the
project costs, if they have to pay service tax on all services used and VAT on
all inputs. This extra cost may not be claimed under escalation clauses.
·
Most political parties in UP (except BJP) had
accumulated the cash required for election related expenses, as they were
planning to formally launch campaigns from 11th November (Dev Probdhini
Ekadashi) when the inauspicious four months (Chaumasa) ends. They would find it
hard to return this cash and get the new one in time for elections.
Look at the irony, Modi Ji has
hit the opposition hardest where it hurt the most, but no one can cry. rather
they are forced by media to smile and sing praise for the government!
·
A large number of brokers and financiers were
funding the stock & commodity market transactions in cash. These brokers
and financiers are in trouble, as they face defaults from the traders. They
would need to liquidate all the position immediately. The losses could be
material in cases where the underlying is illiquid mid and small caps stocks.
50-75% price erosion in these stocks may not be exceptional.
·
My daughter was saving the HDNs received on
Diwali and Bhai Dooj for Christmas vacation. She is quite upset to part with
that money as it would need to be deposited in bank account. No trust in money
matters!...to continue tomorrow
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