Search found 113 matches

by Rahulsidhu
04 Sep 2019 09:14
Forum: Technology & Economic Forum
Topic: Indian Economy News & Discussion - Nov 27 2017
Replies: 3750
Views: 679111

Re: Indian Economy News & Discussion - Nov 27 2017

For those who are interested in what I have said, I will leave you with links to a couple of good posts by the economist Sri Thiruvadanthai: https://macromyths.blogspot.com/2018/02/mmt-at-work-case-of-india.html One of the most striking things about India was that the gross public sector deficit (th...
by Rahulsidhu
04 Sep 2019 09:09
Forum: Technology & Economic Forum
Topic: Indian Economy News & Discussion - Nov 27 2017
Replies: 3750
Views: 679111

Re: Indian Economy News & Discussion - Nov 27 2017

Sir - over years i have learnt from our trashy newspapers that FIIs tend to pull money based on sentiment. For instance if the fiscal deficit goes higher then the FIIs feel the GoI doesnt have the economy in control. Not sure if it is true or it is quarter truth from our bone brained BA pass journo...
by Rahulsidhu
04 Sep 2019 05:40
Forum: Technology & Economic Forum
Topic: Indian Economy News & Discussion - Nov 27 2017
Replies: 3750
Views: 679111

Re: Indian Economy News & Discussion - Nov 27 2017

Bear in mind this is July 2017 1. Lower tax rates means higher deficit possibly translates to FII sucking their money out leading to rupee depreciation and pushing the fd higher due to oil import suryag garu, It is great that you are trying to reason your way through the policy actions, flows and c...
by Rahulsidhu
03 Sep 2019 20:22
Forum: Technology & Economic Forum
Topic: Indian Economy News & Discussion - Nov 27 2017
Replies: 3750
Views: 679111

Re: Indian Economy News & Discussion - Nov 27 2017

The govt has again and again taken the opposite approach. Note how with GST, they started off with very high rates to avoid loss, and then brought down the rates as revenue grew. The right approach would have been to start with low rates (ensuring better compliance as well as promoting growth) and ...
by Rahulsidhu
03 Sep 2019 18:58
Forum: Technology & Economic Forum
Topic: Indian Economy News & Discussion - Nov 27 2017
Replies: 3750
Views: 679111

Re: Indian Economy News & Discussion - Nov 27 2017

https://www.livemint.com/market/mark-to-market/what-are-the-key-reasons-behind-india-s-rising-electronic-exports-1567447780118.html Bright spot in the economy...As much as I see the merits of rahulsidhuji's arguments against the current fiscal policy I think that we should give the leadership time ...
by Rahulsidhu
03 Sep 2019 18:41
Forum: Technology & Economic Forum
Topic: Indian Economy News & Discussion - Nov 27 2017
Replies: 3750
Views: 679111

Re: Indian Economy News & Discussion - Nov 27 2017

If any one is taking a hit to keep the economy running, it should be the government Exactly. The govt has again and again taken the opposite approach. Note how with GST, they started off with very high rates to avoid loss, and then brought down the rates as revenue grew. The right approach would ha...
by Rahulsidhu
03 Sep 2019 17:29
Forum: Technology & Economic Forum
Topic: Indian Economy News & Discussion - Nov 27 2017
Replies: 3750
Views: 679111

Re: Indian Economy News & Discussion - Nov 27 2017

Ever wondered why GoI is so loathe to cut taxes but readily agrees to throw away huge chunks of cash to recapitalize PSUs especially PSBs? This question was on the back of my mind for a long time and I thought it had something to do with the inner workings of bureaucracy or politics. But it occurs t...
by Rahulsidhu
03 Sep 2019 17:19
Forum: Technology & Economic Forum
Topic: Indian Economy News & Discussion - Nov 27 2017
Replies: 3750
Views: 679111

Re: Indian Economy News & Discussion - Nov 27 2017

https://pbs.twimg.com/media/EDiFZJHUwAAZYIf?format=jpg&name=medium Make no mistake, it is this myopic, unhealthy obsession with fiscal deficit numbers that is largely responsible for our mess. In my life I have seen economists do a lot of damage, but this episode really takes the cake.
by Rahulsidhu
31 Aug 2019 16:06
Forum: Technology & Economic Forum
Topic: Indian Economy News & Discussion - Nov 27 2017
Replies: 3750
Views: 679111

Re: Indian Economy News & Discussion - Nov 27 2017

https://swarajyamag.com/economy/structural-cyclical-or-structural-cyclical Make no mistake, what we have is a classic demand crisis and fiscal and monetary hawks will do us no favour if they continue to tread on the same path and keep prescribing their rigid norms. In fact, it may well be the case t...
by Rahulsidhu
31 Aug 2019 13:33
Forum: Technology & Economic Forum
Topic: Indian Economy News & Discussion - Nov 27 2017
Replies: 3750
Views: 679111

Re: Indian Economy News & Discussion - Nov 27 2017

Looking at reactions from policy makers in PMEAC and Finmin, the signs are not good. 1) The top excuse seems to be that global growth is slow, trade war is affecting us. I find this puzzling as China is the epicenter of global weakness, and it is affecting the countries that export to China - German...
by Rahulsidhu
31 Aug 2019 13:19
Forum: Technology & Economic Forum
Topic: Indian Economy News & Discussion - Nov 27 2017
Replies: 3750
Views: 679111

Re: Indian Economy News & Discussion - Nov 27 2017

Isn't it though? What foreign liabilities do they have? Three quarters of RBI's balance sheet comprises foreign currency holdings, a significant part of it with associated liabilities, both short and long tenor. Some of their reserves (the CGRA part) are aimed at exchange rate management with these...
by Rahulsidhu
30 Aug 2019 19:05
Forum: Technology & Economic Forum
Topic: Indian Economy News & Discussion - Nov 27 2017
Replies: 3750
Views: 679111

Re: Indian Economy News & Discussion - Nov 27 2017

Questions also need to be asked of the RBI. They are again caught off guard with their growth estimates. Yet they insist on keeping real rates at >2%, somehow claiming that a 35 bps cut will be "enough to close the output gap". Shouldn't there be some sort of accountability?
by Rahulsidhu
30 Aug 2019 18:53
Forum: Technology & Economic Forum
Topic: Indian Economy News & Discussion - Nov 27 2017
Replies: 3750
Views: 679111

Re: Indian Economy News & Discussion - Nov 27 2017

GDP Q1 comes in at 5%. It confirms what people (including on this forum) have been saying: there is a serious slowdown. https://i.ibb.co/QrqCmTv/Screenshot-2019-08-30-at-8-59-47-PM.png All data so far suggests Q2 will be poor as well. Many are counting on a sharp Q3 recovery, but I am not so sure. D...
by Rahulsidhu
30 Aug 2019 18:43
Forum: Technology & Economic Forum
Topic: Indian Economy News & Discussion - Nov 27 2017
Replies: 3750
Views: 679111

Re: Indian Economy News & Discussion - Nov 27 2017

Suraj wrote:
Rahulsidhu wrote:My answer is different. I don't think CBs running only domestic liabilities

That's not quite true for the RBI :)


Isn't it though? What foreign liabilities do they have?
by Rahulsidhu
30 Aug 2019 13:42
Forum: Technology & Economic Forum
Topic: Indian Economy News & Discussion - Nov 27 2017
Replies: 3750
Views: 679111

Re: Indian Economy News & Discussion - Nov 27 2017

My answer is different. I don't think CBs running only domestic liabilities can be ever insolvent except if the govt explicitly wants them to and passes laws to push them into insolvency. I don't see how that would ever happen, but theoretically it's possible I guess. This is an old paper from 2008 ...
by Rahulsidhu
30 Aug 2019 11:28
Forum: Technology & Economic Forum
Topic: Indian Economy News & Discussion - Nov 27 2017
Replies: 3750
Views: 679111

Re: Indian Economy News & Discussion - Nov 27 2017

Suraj, thanks for your many detailed and informative posts on this topic. But my question is even more basic: can the RBI, which has liabilities only in rupees, and which can create rupees at will, ever go bankrupt? Imagine there is a massive bond selloff which leads to lower asset value on the RBI ...
by Rahulsidhu
30 Aug 2019 05:45
Forum: Technology & Economic Forum
Topic: Indian Economy News & Discussion - Nov 27 2017
Replies: 3750
Views: 679111

Re: Indian Economy News & Discussion - Nov 27 2017

question worth asking re: RBI reserves -

Is the RBI like a "normal" bank? Can it go bankrupt? If yes, how, and if no, what are these reserves for?
by Rahulsidhu
30 Aug 2019 05:42
Forum: Technology & Economic Forum
Topic: Indian Economy News & Discussion - Nov 27 2017
Replies: 3750
Views: 679111

Re: Indian Economy News & Discussion - Nov 27 2017

In all your posts so far I have not seen a deeper analysis of the complexities both in outcome and in process(es) that supports your arguments other than the following general statements 1. Money is unlimited 2. Money should be distributed freely I feel this is unfair. In many of my posts I have al...
by Rahulsidhu
27 Aug 2019 14:18
Forum: Technology & Economic Forum
Topic: Indian Economy News & Discussion - Nov 27 2017
Replies: 3750
Views: 679111

Re: Indian Economy News & Discussion - Nov 27 2017

^^^Rahulsidhu what was the consumer price inflation when NDA-1 took office? This is Chidambaram: Was high inflation a big red in your report card? I think so. I think high inflation was a big red in the UPA-2 report card. —- IMO high growth rate but with high inflation is not electorally acceptable...
by Rahulsidhu
27 Aug 2019 11:02
Forum: Technology & Economic Forum
Topic: Indian Economy News & Discussion - Nov 27 2017
Replies: 3750
Views: 679111

Re: Indian Economy News & Discussion - Nov 27 2017

^^ (I am not 100% sure, just guessing. Please correct if I am wrong) This "excess capital" is mainly due to USD appreciation. Maybe also some trading profits. The RBI holds a large amount of foreign currency. As INR slips, the balance sheet generates a profit due to revaluation. This shows...
by Rahulsidhu
24 Aug 2019 19:58
Forum: Technology & Economic Forum
Topic: Indian Economy News & Discussion - Nov 27 2017
Replies: 3750
Views: 679111

Re: Indian Economy News & Discussion - Nov 27 2017

^^ I've seen and heard the same. Which is why this was step 1 in my two step stimulus package.

A big "structural reform" would be simply for the govt. to, by policy or by law, be required to make due payments within a short, specified time frame.
by Rahulsidhu
24 Aug 2019 18:43
Forum: Technology & Economic Forum
Topic: Indian Economy News & Discussion - Nov 27 2017
Replies: 3750
Views: 679111

Re: Indian Economy News & Discussion - Nov 27 2017

To explain the above post a little: The sectoral balances identity for any economy is thus (G-T) = (S-I) + (M-X) Fiscal Deficit. Pvt sector surplus Foreign sector surplus This is just an accounting identity, following from GDP accounting. Here is an interpretation: the govt, very easily can spend mo...
by Rahulsidhu
24 Aug 2019 18:10
Forum: Technology & Economic Forum
Topic: Indian Economy News & Discussion - Nov 27 2017
Replies: 3750
Views: 679111

Re: Indian Economy News & Discussion - Nov 27 2017

Regarding NPAs: It is true that there was reckless lending in UPA2 era, but another fact is that NDA policies post 2014 have exacerbated the crisis. How? By running too tight a ship. Based on neoclassical econ precepts -- targeting a lower deficit -- the govt. has sought to deleverage at the same ti...
by Rahulsidhu
23 Aug 2019 18:07
Forum: Technology & Economic Forum
Topic: Indian Economy News & Discussion - Nov 27 2017
Replies: 3750
Views: 679111

Re: Indian Economy News & Discussion - Nov 27 2017

Indian policymakers seem to think that the slowdown (to the extent they do recognize it) is a very complex issue that can only be dealt with through esoteric "structural reforms™ ". In actual fact, the entire problem is very simple when viewed through the correct macroeconomic lens: The go...
by Rahulsidhu
14 Aug 2019 10:50
Forum: Technology & Economic Forum
Topic: Indian Economy News & Discussion - Nov 27 2017
Replies: 3750
Views: 679111

Re: Indian Economy News & Discussion - Nov 27 2017

https://www.livemint.com/companies/news/aramco-bp-to-help-mukesh-ambani-slash-22-billion-of-reliance-s-debt-1565608961411.html While the FDI is obviously good news, a question worth asking is: why does India's top, highly ambitious business group, investing into highly capital intensive industries,...
by Rahulsidhu
12 Aug 2019 20:40
Forum: Technology & Economic Forum
Topic: Indian Economy News & Discussion - Nov 27 2017
Replies: 3750
Views: 679111

Re: Indian Economy News & Discussion - Nov 27 2017

This scheme you have outlined would make them an inverse bank. Sorry, that's not how corporate finance is done.
by Rahulsidhu
12 Aug 2019 20:30
Forum: Technology & Economic Forum
Topic: Indian Economy News & Discussion - Nov 27 2017
Replies: 3750
Views: 679111

Re: Indian Economy News & Discussion - Nov 27 2017

https://www.livemint.com/companies/news/aramco-bp-to-help-mukesh-ambani-slash-22-billion-of-reliance-s-debt-1565608961411.html While the FDI is obviously good news, a question worth asking is: why does India's top, highly ambitious business group, investing into highly capital intensive industries,...
by Rahulsidhu
12 Aug 2019 19:39
Forum: Technology & Economic Forum
Topic: Indian Economy News & Discussion - Nov 27 2017
Replies: 3750
Views: 679111

Re: Indian Economy News & Discussion - Nov 27 2017

https://www.livemint.com/companies/news/aramco-bp-to-help-mukesh-ambani-slash-22-billion-of-reliance-s-debt-1565608961411.html While the FDI is obviously good news, a question worth asking is: why does India's top, highly ambitious business group, investing into highly capital intensive industries, ...
by Rahulsidhu
10 Aug 2019 05:46
Forum: Technology & Economic Forum
Topic: Indian Economy News & Discussion - Nov 27 2017
Replies: 3750
Views: 679111

Re: Indian Economy News & Discussion - Nov 27 2017

Re: monetary transmission Let's say that the banks are unable to cut rates due to their funding costs being too high. What the RBI can do is offer a term repo facility to cheapen bank funding costs - open two or three repo windows (sovereign, quasi-sovereign, corporate) and offer funding up to 6mths...
by Rahulsidhu
08 Aug 2019 12:33
Forum: Technology & Economic Forum
Topic: Indian Economy News & Discussion - Nov 27 2017
Replies: 3750
Views: 679111

Re: Indian Economy News & Discussion - Nov 27 2017

A lot has been written recently about how global bond yields are extraordinarily low and this is a golden opportunity for India to issue overseas bonds to take advantage. But I want to propose an alternative hypothesis: The global bond rally is a decades long secular up-trend, and it is not so much ...
by Rahulsidhu
08 Aug 2019 12:03
Forum: Technology & Economic Forum
Topic: Indian Economy News & Discussion - Nov 27 2017
Replies: 3750
Views: 679111

Re: Indian Economy News & Discussion - Nov 27 2017

I watched a bit of the post meeting Q&A. It was just painful to watch. In a response to a Q about why real rates are > 2%+, the gov. just mumbled something about closing the output gap. I would love to see the analysis they did which said they need to cut 35 in order to close the output gap but ...
by Rahulsidhu
08 Aug 2019 10:02
Forum: Technology & Economic Forum
Topic: Indian Economy News & Discussion - Nov 27 2017
Replies: 3750
Views: 679111

Re: Indian Economy News & Discussion - Nov 27 2017

RBI is behind the curve. Both them and Govt. are underestimating the slowdown.
by Rahulsidhu
06 Aug 2019 11:45
Forum: Technology & Economic Forum
Topic: PRC Economy - New Reflections : April 20 2015
Replies: 1269
Views: 158905

Re: PRC Economy - New Reflections : April 20 2015

One thing to keep in mind when thinking about the trade war b/w US & China - things are not how they seem on the surface. Just a few weeks ago, there was the meeting in Osaka and a sense of general optimism in the markets. But behind the scenes, things had worsened. Right now, things are looking...
by Rahulsidhu
06 Aug 2019 11:42
Forum: Technology & Economic Forum
Topic: PRC Economy - New Reflections : April 20 2015
Replies: 1269
Views: 158905

Re: PRC Economy - New Reflections : April 20 2015

IMO, the situation is not so simple. What has come of the trade war so far? China is countering the tariffs by devaluing its yen. What's the US going to do? Devalue its own currency? It can't because it is the reserve currency. How does that stop the US from buying foreign currencies? This is a ver...
by Rahulsidhu
06 Aug 2019 11:36
Forum: Technology & Economic Forum
Topic: Indian Economy News & Discussion - Nov 27 2017
Replies: 3750
Views: 679111

Re: Indian Economy News & Discussion - Nov 27 2017

Worth keeping in mind. I think this is goods trade only.
Image
by Rahulsidhu
04 Aug 2019 07:45
Forum: Technology & Economic Forum
Topic: Indian Economy News & Discussion - Nov 27 2017
Replies: 3750
Views: 679111

Re: Indian Economy News & Discussion - Nov 27 2017

rahulsidhu ji the chart used by you are from the article linked hereunder. there are a few other illustrative charts also included in the article https://timesofindia.indiatimes.com/business/india-business/five-reasons-why-the-economy-is-slowing-down/articleshow/70497728.cms the article is quite in...
by Rahulsidhu
03 Aug 2019 14:00
Forum: Technology & Economic Forum
Topic: Indian Economy News & Discussion - Nov 27 2017
Replies: 3750
Views: 679111

Re: Indian Economy News & Discussion - Nov 27 2017

This chart mixes yearly and quarterly numbers but shows the trend well. (sorry i don't know the source, or would have credited) https://pbs.twimg.com/media/EBB9r8-VAAAY_hR.jpg:large Q1 GDP growth is likely to be quite weak as well, probably below 6%. Projections for the full year are generally aroun...
by Rahulsidhu
02 Aug 2019 16:58
Forum: Technology & Economic Forum
Topic: Indian Economy News & Discussion - Nov 27 2017
Replies: 3750
Views: 679111

Re: Indian Economy News & Discussion - Nov 27 2017

A window into the govt's thinking. It's not a pretty picture

Image
by Rahulsidhu
02 Aug 2019 06:01
Forum: Technology & Economic Forum
Topic: Indian Economy News & Discussion - Nov 27 2017
Replies: 3750
Views: 679111

Re: Indian Economy News & Discussion - Nov 27 2017

Suraj wrote:GoI is also trying to fix this figure - falling gross domestic savings and especially private corporate savings has been a major reason for lack of growth.


I would argue that the causation is the other way around. Will explain in a later post hopefully.
by Rahulsidhu
02 Aug 2019 05:59
Forum: Technology & Economic Forum
Topic: Indian Economy News & Discussion - Nov 27 2017
Replies: 3750
Views: 679111

Re: Indian Economy News & Discussion - Nov 27 2017

I'm not sure how you interpret the M3 long term trend as linear. The 'max' view of the data shows that the graph is parabolic. Sorry, should have been more clear - the 1-year and 5-year trends are quite linear. There is an option of adding a trend line and the 1 year and 5 year match it - there is ...

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