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Efficient market hypothesis in question
The search is on to find a replacement to efficient market hypothesis. Efficient market hypothesis in its strongest form indicates that the current price of an asset fully reflects all the available information about the asset. The theory came with 2 fundamental conclusions which have shaped the investment industry as it is today. The conclusion…
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Nano is here
Nano is here Finally the $2000/ 100,000 Rupees car is here. As everybody did I also thought that Nano will probably feel like a bike or a rickshaw on 4 wheels. Initial reviews from test drives suggest otherwise. Looks like Tata Motors managed to make it feel and perform like a real car. The makers…
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Swiss dilemma over currency
Switzerland’s Dilemma is perhaps unique in these markets. Traders in other markets are taking shelter in the safety of Swiss francs. Swiss currency appreciated rapidly in this year creating undesirable effects for the Swiss economy. Now the country wants to devalue its currency. In a unique case they have very limited options. Swiss economy is…
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Recession in pictures
The recession is here. Although we read and hear the news about recession every day it is painful to see it in pictures and what people are going through. What struck me is the pictures are drawn from all across the world in US, UK, Kazakistan, Ukraine, China, Lebanon etc. So if any one says…
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Fed is printing money
Fed in Bond-Buying Binge to Spur Growth The printing press is on. Fed is printing money to buy $300bn treasuries from banks to increase the money supply in private credit markets. With the Fed funds rate down to 0.25% there are hardly any choices left for the Fed to give a jolt to the economy.…
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Innovative business models from India
A business model nurtured in the western world is not necessarily a good model for the emerging countries. The Business Week article India Inc.: A Lesson in Business Design talks about how India is trying to radically reinvent the business models to suit the special conditions in its local markets. Rule of 10% -delivering goods…
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Irony of Credit Default Swaps
This article on Credit-default swaps and bankruptcy highlights another instance of collateral damage of CDS (Credit Default Swaps) contracts to the economy. There was another detailed article in FT on the unintentional and negative outcomes of CDS contracts (which I will find and post again here). It is a commonly held assumption that when a…
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Whither Annual budgets
This article Corporate planning through the fog describes how annual budgets will become a thing of the past. The markets and economy are changing so rapidly, more now than ever, that a budget may become useless in the next quarter. Here is what other companies are doing. I was a bit perplexed by this article…