On 31st (Monday) morning, interest rate futures trading will start at NSE for the second time. Watch me on the CNBC TV18 website on interest rate futures. I had a blog post on this recently; Mobis Philipose has an article in Mint; Financial Express has an editorial. In Economic Times today, Mayur Shetty interviews B. Prasanna of ICICI Securities PD, and Gaurav Pai has some worrisome reportage about possible regulatory problems that might come in the way.NSE has setup a nice web page on interest rate futures which is the...
Sunday, 30 August 2009
Thursday, 27 August 2009
Wednesday, 26 August 2009
Tuesday, 25 August 2009
NSE has announced that on 31 August, they will trade interest rate futures. I believe BSE will also be in this fray soon thereafter.After the Percy Mistry and Raghuram Rajan reports, there was a bad RBI committee report in August 2008. This led into a `RBI/SEBI Standing Technical Committee report' which spent ten months doing product design. This is central planning at its worst; every detail about the product is specified by the government, through a committee which has nobody from the private sector. And we went from bad to worse:...
An editorial in Financial Express on recent efforts to snarl up `minor' ports, which are the hotbed of progress in India's ports. Writing in Foreign Affairs, Christian Le Miere proposes a way for China to deal with its problems in Tibet and Xinjiang. In similar fashion, Sri Lanka has problems with the Tamil regions.I have a suggestion for a well-tested approach that could help forge a union out of diverse provinces: the federal structure of the Indian Constitution. Some of these ideas could be ported to these new...
Monday, 24 August 2009
The Bank of Israel has become the first central bank worldwide to raise interest rates in this downturn. A few weeks ago, I wrote an elongated blog post titled Does unconventional monetary policy and unusual fiscal policy presage an upsurge in inflation?. This was partly motivated by the concerns of the time (this was in mid-June) about the exit strategy of central bankers. I had argued that inflation targeting gave the right framework for all three phases: the sharp drop in the policy rate, the shift to quantitative easing...
Maps vs. map data: appropriately drawing the lines between public and private Comment by Anonymous: OSM is a good effort, but it's license is flawed. It should be a pure public domain license, and it is not - they selected CC-by-SA. To their credit, they have been discussing this fascinating issue on their website. (See http://www.opengeodata.org/?p=262) The other issue is that their data is still not good enough - it will take some time to get there, but throwing money is not the solution. users / volunteers will do a better job here! Re:...
Saturday, 22 August 2009
Where is India in terms of usage of the Internet? One way to think about this question is to look at specific application areas. I saw three fragments of evidence:Online tradingWriting in Hindu Business Line, Rajalakshmi Sivam has interesting information about the share of online trading on NSE: 2006Today Number of trades 20% 33% Rupee turnover 15% 25% Railway ticketsWriting in Business Standard, Sharmishtha Mukherjee says that 34% of the tickets sold by Indian Railways were sold online.Banking transactionsBusiness...
Ganesh Varadarajan pointed out that on 22 August 2009, Scott Adams made a perfect cartoon for my Business Standard column titled Two great investment strategies of 22 April 1998. For a gloomy perspective on the difficulties of the fund industry in countries like India, see Section 10.11 of this bo...
Friday, 21 August 2009
Tuesday, 18 August 2009
The progress of the 2009 monsoon seems to be 29% below normal. This may be adversely affecting food prices. In the latest available data, inflation based on CPI-IW has surged back to values near 10%. (This is the three-month moving average of the rate of change of seasonally adjusted CPI-IW). Ila Patnaik has an article in Indian Express analysing the implications of this situation for monetary policy. India really needs an `inflation report' instituti...
Sunday, 16 August 2009
Somasekhar Sundaresan has written in Business Standard on the proposed Financial Services Appellate Tribunal (FSAT). Deepshikha Sikarwar has written in Economic Times on the proposed movement towards Regulatory Impact Assessment (RIA). These ideas come from the Mistry and Rajan reports.These words -- financial services appellate tribunal; regulatory impact assessment -- sound like true bureaucratese, and these kinds of issues tend to get ignored by both practitioners and economists. However, this is where the rubber hits the road, this is where...
Saturday, 15 August 2009
Amy Yee has an article in Financial Times on the New Pension System. On NPS, you might like to also see two articles: this and this. Ila Patnaik on present business cycle conditions. When we were robots in Egypt a poem by Jo Walton. Read Mark Hulbert describe new work by Lasse H. Pederson on the challenge of buying and holding financial assets. The case of the Chinese mayor who wasn't there by Tom Mitchell in Financial Times. A smart omission of commission by Megha Patnaik in Financial Express....
Wednesday, 12 August 2009
Tuesday, 11 August 2009
One element of responding to the fiscal stress that India is now facing consists of the creation of the Debt Management Office. I have an article in Financial Express titled What is the right time to build a DMO?, and there is one in Economic Times by Siddharth Shah, Chittaranjan Datar and Nirvaan Gupta titled Is India ready for debt management office?. Also see this editorial in Financial Express on the new Cash Management Bil...
Monday, 10 August 2009
Peter Wayner has a story about a WiMax rollout in Baltimore in the US. They seem to be getting 6 Mb/s download and 1 Mb/s upload. This is termed a `4G' network (which might just be marketing speak). In India, Thomas K. Thomas has an article on price cuts by Airtel. My sense is that we're in for a big crash in prices of bandwidth through a combination of improvements in prices of wired services and the rollout of 3G which is now a credible alternative to land lines. The exciting new development on mobile bandwidth is...
Developments in India and China on internationalisation. Watch Aruna Roy and Nikhil Dey on Ila Patnaik's TV show: part 1 and part 2. [also see] Anne Sibert on the problems of Iceland being a small country. I would enlarge her comments, and add Dubai or Singapore into the class of countries where the (inadequate) fiscal backstop of a small government leads to somewhat reduced confidence in the international financial...
India's financial markets' availability Comment by Gangineni Dhananjhay Sir, I really liked your book as a researcher on Microstructure of Indian Capitalmarkets at JNTU Hyderabad. Excellent prose with empirical clarity. It felt like reading Hemingway. It reminded me of Trading & Echanges by Larry Harris. Building a better credit policy speech Comment by bagdu RBI has considerable lack of transparency on its Branch expansion policy,I have tried to analyse the policy at: (http://bagdu.blogspot.com/2009/07/rbis-branch-expansion-policy.htm)...
Saturday, 8 August 2009
Air India has got itself into serious trouble, and private airlines are also doing badly. The CMIE report on air transport for August 2009 shows a bad picture for the airline industry: from the quarter ended June 2007 onwards, in each quarter, the PAT margin was negative. There are three interesting aspects to the present situation. The first is about the role of the State. Flying by plane is a private good and not a public good. Seats in a plane are rival and excludable. I fly in a plane, I benefit. There is, hence, no role for government...
Friday, 7 August 2009
I write an article in Financial Express about maps and map databases titled New thinking on a traditional public good. See excellent responses on this on the India mailing list of openstreetmap: by B V Pradeep and by Satyaakam Goswami. And, see Want to map your hometown? Throw a party by Poornima Mohandas in Mint. For background on openstreetmaps, see this this article by Gary Richmond from October 20...
Thursday, 6 August 2009
Wednesday, 5 August 2009
The most basic public good of all, which should be the first priority of the government, is law and order. If you think of the principal-agent relationship between citizens and State, citizens would want to tie down the State to first focus on law and order, and deliver results on law and order, before embarking on mission creep. One of the unhappy consequences of India's socialist adventure was a breakdown of this principal-agent relationship, and a loss of focus on this core function. See a recent column by Avinash Persaud in Financial...
Monday, 3 August 2009
Fresh faces in government by Manish Sabharwal in Mint, about the appointments process in the Indian government. See the nice map of the market on the NSE website, which helps you visualise the sources of returns on Nifty. Watch Ashok Gulati on Ila Patnaik's TV show. There has been a lot of interest in the wonderful world of algorithmic trading. The Economist does the reporting, and here's a more interesting description, and then you should turn to Eric Falkenstein and Kid Dynamite for the insights....
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