INSUBCONTINENT EXCLUSIVE:
Viktor Shvets, Head of Asian Strategy at Macquarie Securities recently published a report on who could be the next fall guy amidst the
current trade and monetary disputes in the world, and also provides a long-term solution.
We recently published our Indian Macroeconomic
advantages the Indian economy demonstrates
The real question is what this all means, but the biggest clue will be in escalating warnings like this.
Nike, as one of the most successful
This is worth a read that has lessons especially if you are an entrepreneur or aspire to be one.
I reiterate that this is only a sampling of
some of the best content I read through the week, with a dash of my own thoughts
In the 1985 Plaza Accord, that fall guy was Japan, which accepted a 50% higher forex rate to accommodate the conflicting interests of other
In 1990s/2000s, it was the US that aggressively promoted a global agenda
While trade and globalisation are not zero-sum games, the distribution of gains and losses is not uniform
This is the big problem, amplified by our system of delineated nation-states
monetary base and current account deficits) are no longer growing but global economy cannot expand unless the dollar is relatively weak
As the Donald Trump administration insists on smaller deficits, the liquidity is further constrained
The most natural candidate is China; however, it is unlikely to be willing or able to carry the burden of rapid renminbi appreciation
It is highly unlikely that China would accept Plaza Accord II while euro zone needs global reflation to keep its deeply flawed monetary
system afloat and Japan continues to export capital not demand while its long-term positioning is unclear
Hence, the US must generate rising deficits to lubricate the system
currency must run ever-increasing deficits or find alternative ways of somehow injecting sufficient liquidity to fund and lubricate global
trade and interactions.
There exists a long-term solution, which involves replacement of the dollar with new non-country specific global
currency and close policy coordination
No one wants it for now, until some day they might have no other choice.
Macroeconomic Dashboard- India(Source: Macroeconomic
Dashboard)Valuewalk recently published Macroeconomic dashboard for April
reversed its movement in early April falling to levels of 7.13% from 7.4% in March 2018, but increased again to 7.8%
As seen in other EMs, the countries with weak macro variables and high FPI exposure to local debt have seen sell off in their currency and
It had an effect on Indian bond markets as well, bond yields continue to be under pressure due to weakening macro variables (oil, inflation,
April 27, the highest in the last 12 months to Rs 84.8 lakh crore
The credit flow from mutual funds and other non-banking institutional lenders has reduced due to lack of liquidity with them
crore for the fortnight ended April 27, 2018, rebounding from the slow growth rate since Nov 2017, which is attributable to the high base
due to demonetisation less attractive interest rates offered by the banks
Indian banks are raising deposit rates like other banks in different parts of the world but mainly to corporate/institutional segment
increased 17.4% y-o-y in April 2018, driven by strong growth in commercial vehicles that rose 76% YoY, two-wheeler sales, which grew 16.9%
and passenger vehicles that registered a healthy growth of 7.4%
The high frequency indicators suggest sustained growth in consumption sector aided by recovery in rural sector
rose to 51.6 in April 2018 from 51 in March and above the 50-point mark that separates growth from contraction for the ninth straight month
The pick-up in growth was buoyed by stronger demand conditions supported by faster expansions in output and new orders.
Shoe Dog: How Nike
There he wrote a case study about building a shoe company by breaking into the track and field shoe industry!
When his first shipment of 12
shoes arrived, he sent a pair to his former track coach, who would become a co-founder of his company
From 12 shoes to billions in revenue
From such humble beginnings to such an amazing success
He remembered the early resource-starved days of struggling together with his team to solve problems of ever increasing complexity to bring
into being something which had never existed before
He describes amazing highs, soul-searching lows, and everything in between as the team of misfits and iconoclasts that he had assembled
battled its way through one problem after another.
Your only tools to combat these problems, and to create the solutions that make companies
successful, is to have the right people on your team
During the 2000s, up until the Great Financial (dollar) Crisis, there was practically no volatility in it at all
During the panic, the rupee fell like so many others - ending the "devaluation" in March 2009.
Recovering quickly, it wasn't until the 2011
crisis that the rupee and India's inflation problems really began
In that way, the rupee has been a pretty good indicator for global "dollar" conditions, and especially this post-2011 sort of permanence to
it all.
The emerging market crisis in 2013 or "rising dollar" would move on to other places, mostly China and the other two BRICs
Many credited, and still do, the Reserve Bank of India's late 2013 policy actions for that relative tranquility
Whatever the cause, the rupee fell again during the main of the "rising dollar" episode, finally hitting bottom in later February 2016.
The
currency appears to signal once more unwelcome "rising dollar" tendencies, despite whatever very real advantages the Indian economy
demonstrates over its rivals.
It is the timing, and more so the intensity, of this latest move that draws our focus
Reflation via appreciating rupee proceeded pretty solidly until first clearly interrupted in early September 2017
The big move began in late January 2018, in the days leading up to the global liquidations
The unit has since that time just about crashed; it hasn't behaved like this since 2013.
Indian currency should reflect some greater measure
of stability by its own fundamental prospects
There are too many major moves all lining up together and in the wrong direction
It started with the US, and that part is confirmed
The real question is what this all means, up to and including whether it marks the start of whatever the next phase of Eurodollar decay
We obviously won't know anything like that for some time, but the biggest clue will be in escalating warnings like this.
