Expert Zone

Straight from the Specialists

The crippling effect of QE3

Photo
-

(The views expressed in this column are the author’s own and do not represent those of Reuters)

It was tried twice before and it is being tried once again. Whether quantitative easing (QE3) will increase employment in the United States is questionable. But it will certainly disturb currency exchange rates of emerging market economies with related consequences.

The Federal Reserve took three major monetary decisions last September. First, it will buy $40 billion  mortgage-backed securities every month indefinitely until there is improvement in the labour market; second, it extended ‘Operation Twist’ entailing purchase of long-term bonds against short-term bonds till the end of 2012; third, it will continue its near-zero interest rate guidance until mid-2015.

These measures have huge implications for the United States and for the rest of the world. They will amount to pumping in $184 billion in the three months ending 2012 and $40 billion a month thereafter. This infusion of liquidity is intended to hold mortgage rates down which are already very low.

Emerging priorities in the war against terrorism

Photo
-

(The views expressed in this column are the author’s own and do not represent those of Reuters)

There are different models that nations have adopted to fight insurgencies. Sri Lanka used all the forces at its disposal. The results, humanitarian aspects set aside, led to the insurgent movement being defeated comprehensively.

India Markets Weekahead: RBI policy review to be catalyst for markets

Photo
-

(The views expressed in this column are the author’s own and do not represent those of Reuters)

This was a listless week with the Nifty in the same band of 5640 and 5720 as the previous week, closing about 20 points lower at 5664. The festival  season has begun but the mood on the street remains cautious.

RBI policy: Cut in repo rate imperative

Photo
-

(The views expressed in this column are the author’s own and do not represent those of Reuters)

The Reserve Bank of India (RBI) is fixated on inflation and with that rigid mindset it is difficult to expect any liberalisation of monetary policy. But there are other parameters that have changed. Food inflation was down in September if that is any comfort. More than that, the budget deficit will be reduced with a cut in subsidies on diesel. There are also initiatives being taken on reforms. Obviously, the RBI needs to tune its policy to fit the new situation. If the RBI does change its stance, what instrument is it likely to use?

Time for real reforms, but low-hanging fruits remain

Photo
-

(The views expressed in this column are the author’s own and do not represent those of Reuters)

What seemed to be a lost cause merely three months ago has staged a remarkable comeback: the Indian government’s zeal for reform. After many months of dithering, the ruling Congress party remembered that it had the spine to stand up to fierce opposition from various state governments, finally getting its way on certain measures.

India Market Weekahead – Reforms, RBI rate cut could help Nifty break 5,800

Photo
-

There was consolidation within a narrow Nifty band of 5,640 and 5,720 last week, with a bit of volatility and a flat closing at 5,684.

Heavyweight results and political heat dominated the mood on the street. The government’s reform agenda continued with a Group of Ministers (GoM) panel clearing a watered down land acquisition bill, a development which was cheered by industry leaders only to be later vetoed by Congress chief Sonia Gandhi. The much awaited expose by activist-turned-politician Arvind Kejriwal failed to create ripples.

The RBI and its inflation dilemma

Photo
-

(Arvind Chari is a senior fund manager of Quantum Asset Management Company Private Limited. The views expressed in this column are his own and do not represent those of either Quantum AMC or Reuters.)

The wholesale price index number for September (7.81 percent) poses a dilemma for the Reserve Bank of India (RBI). With the finance ministry leaving no opportunity to make its case for lower interest rates and exhorting the RBI to take ‘calibrated risks’, the recent inflation data gives no comfort to the RBI to go ahead and confidently cut the repo rate in its October policy review.

Banks as a shop for insurance

Photo
-

(The views expressed in this column are the author’s own and do not represent those of Reuters)

The concept of insurance plans being sold through banks is called ‘bancassurance’ and there is a lot of interest in this distribution channel from all the stakeholders - customers, banks, insurance companies and the regulator.

If the U.S. and EU slide into recession

-

(The views expressed in this column are the author’s own and do not represent those of Reuters)

There are apprehensions that the U.S. and EU could drift into recession again. The economic crisis of 2008 unnerved every country, with growth either turning negative or falling drastically. The recovery from that recession was weak and any relapse could be prolonged.

India market weekahead: Consolidation seen, earnings in focus

Photo
-

(The views expressed in this column are the author’s own and do not represent those of Reuters)

October has been touted as a difficult month for stocks, though for the Indian markets there didn’t seem to be anything stopping the repeat show of October 2011 until the flash crash on 5th.

  • Editors & Key Contributors