Tuesday, October 16, 2018

Present tense, but hope prevails

Wishing all readers a blissful Durga Ashtami and an illuminating Dusshera!
असतो मा सदगमय॥ तमसो मा ज्योतिर्गमय॥ मृत्योर्मामृतम् गमय॥
(Let's move from falsehood to truth; from darkness to light and from decay to salvation)
 
Some food for thought
A wind has blown the rain away and blown the sky away
and all the leaves away,
and the trees stand.
I think,
I too, have known autumn too long.
—E. E. Cummings (American Poet, 1894-1962)
Word for the day
Patzer (n)
A casual, amateurish chess player
 
First random thought this morning
An overwhelming large proportion of politicians and their supporters in India appear mostly unemployed or at best employed in disguise. Many of them have voluntarily taken up the job of "Certifying Authority".
They are issuing certificates about anything and everything. For example—
Certificate of nationalism credentials: BJP leaders and supporters certifies all those as "nationalist" who support RSS, BJP, VHP et. al. Whereas Congress leaders and supporters is however more selective. they feel that since INC was the only agency that negotiated modalities of independence with the British Empire, only descendents of pre independence INC leaders  could be certified as Nationalists.
Certificate of Religion: People on BJP side make a distinction between Hindu and Non-Hindu, Ramzade and otherwise; etc. A Congress leader has gone a step further and made distinction between "Good Hindus" and "Other Hindus"
Certificate of Indianness: BJP and its Supporters feel that only those who publicly chant Bharat Mata ki Jai and sing Vande Matram can be certified as Indians. Congress would however be happy to certify anyone who is likely to vote for Rahul Gandhi as PM.
Chart of the day

 
Notes from my Diary
The members of International Monetary and Financial Committee (IMFC), comprising of finance ministers and central bankers of the members of IMF and World Bank, almost made it clear the expansion of global economy seen in past five years is facing strong headwinds. There may be some pockets of growth, but an overall pickup in global growth is not seen in next few years.
The final communiqué issued last weekend, post the Bali meet of IMFC, categorically stated that the risks to the global growth are now "increasingly skewed to the downside amid heightened trade tensions and ongoing geopolitical concerns, with tighter financial conditions particularly affecting many emerging market and developing countries. Policy uncertainty, historically high debt levels, rising financial vulnerabilities, and limited policy space could further undermine confidence and growth prospects."
The following five commitments made in the final communiqué are noteworthy, in my view:
"Central banks, in line with their mandates and mindful of financial stability risks, should maintain monetary accommodation where inflation is below target, and withdraw it in a gradual, well-communicated, and data dependent manner where inflation is close to or above target."
"We recognize that excessive volatility or disorderly movements in exchange rates can have adverse implications for economic and financial stability. We will refrain from competitive devaluations and will not target our exchange rates for competitive purposes."
"We will strive to address challenges from demographic shifts and enhance inclusion to widely share the gains from technological advancement and economic integration. We will work together to reduce excessive global imbalances in a way that supports sustainable global growth."
To me these three pledges of IMFC members clearly highlight that the concerns over US-China trade war are rising may overwhelm the policy stance across the world in short term.
Back home, RBI released its latest Consumer Confidence Survey results last week.
The Survey highlights that the genesis of the dichotomy in Indian markets. The Indian consumers are significantly less confident about the current conditions, but still remain overly optimistic in their future expectations.

 
The September quarter results of FMCG major Hindustan Unilever truly reflect this condition.
The results could be said to termed as "Good" per se. But if compared with the market expectations, these were below par. The stock price did also correct some to factor in the disappointment. But since the future expectations are still running high, the derating of stocks is still far away.
In light of what IMFC fears, and what I expect from 2019, I find the following economic forecast of Capital Economics, more reasonable to base my strategy upon.
From today onward, I shall be travelling to MP and Chhattisgarh for 5days. I will share my assessment of the socio-political situation there next week.

No comments:

Post a Comment