Income Inequality
March 25, 2013
Global Unemployment The phenomenon of growing unemployment across the world has become a regular feature across daily news stories. This is not restricted to one nation […]
February 26, 2013
As India grows more prosperous and more citizens get educated, the country is facing a major problem. While every country would kill for millions of graduates […]
February 13, 2013
QE3 The recent announcement by the US Federal Reserve to buy US treasuries and mortgage bonds worth $40 billion a month, led to positive gains in […]
February 11, 2013
During the 1st version of quantitative easing, the US Federal reserve bought around $1.45 trillion of mortgage-backed securities and other agency debt. This entire activity took […]
September 18, 2012
Quantitative Easing by USA The US Federal Bank announced to unlimited Quantitative Easing at the rate of $40 billion a month, surprising the market which at […]
August 6, 2012
Globalization It has been said time and again how Globalization has led to increasing prosperity around the globe with free movement of capital and trade. But […]
July 28, 2012
Rising Capitalism With capitalism of some sort being prevalent in almost all major countries in the world, other ideologies have taken a backseat. Markets have well […]
January 14, 2012
Australia & New Zealand Banking Group , is going to cut 900 jobs are the Australian real estate market slumps. Financial Jobs are facing a carnage with banks cutting down left , right and centre .ANZ which is one of the 4 largest banks in Australia joins its couterparts around the world in sharply cutting banker jobs as the global slowdown bits the financial industry. Note the outlook in the Financial Industry is that of a Depression even as the world economy faces some hiccups from the European Debt Crisis . Real Estate Markets have been distorted globally by bad regulation , low interest rates etc. While China is seeing the first signs of a troubled real estate market, USA has been feeling the effects since the last 3-4 years. Australia has also joined in with the popping of the real estate bubble. Alongwith construction and real estate companies , financial companies who make the real estate mortgages are the worst hit in general.
January 11, 2012
The rising income inequality throughout the world is sowing seeds of dystopia according to a report released by World Economic Forum. The biggest risk amongst the 50 risks listed is the increasing wealth gap between individuals in all countries. Gini's coefficient has risen in most countries developing as well as developed and this has a strong correlation to globalization. The global artitrage of labor has tilted the scales towards capital and increasingly made wages become stagnant. Developing countries with weak institutions are showing income inequality in horrific forms with $2 billion homes existing in the middle of millions surviving on less than $2 day. US has already seen the OWS movement as a result of this increasing income gap between the have and have nots. Middle Eastern countries have also seen revolutions brought upon by the massive riches of the elite compared to the rising poverty of the poor and even the middle classes.
January 9, 2012
Bank of America had already announced thousands of job cuts earlier.Today it cut 20% of its Asian MDs as it tries to cope with the sinking of investment banking revenues.Other investment banks like RBS,Nomura,BNP Paribas,Societe Generale are also cutting jobs with a vengeance.Goldman Sachs also announced big time salary cuts for its partners and fixed income trading.
January 5, 2012
Seeing Stocks Markets these days would make one think that the world economy has managed surpass the problems of the European Union Debt Crisis,the slowing of China,India's governance led slowdown etc.However big global companies continue to bunker down reducing job headcount and reducing investment.Despite record levels of cash and big profits,MNCs are not increasing their investment giving a thumbs down to efforts by policymakers to boost growth through record low interest rates.RBS has been rumored to cut 10,000 jobs in its investment banking division while Pepsi which has a mostly recession proof business too is cutting down.India's beleagured airline Kingfisher is set to cut 2000 jobs as well.
January 3, 2012
Income Inequality is a Theme that is getting played across the world in developing as well as developed nations.Most of the turmoil in 2011 in the Middle East and the Occupy Wall Street Movement can be attributed to the growing Income Gap between the Have and Have -Nots.The Great Recession in 2008 can also be looked upon as a fallout of this.Gini's Coefficient which measures the income distribution gap has shown continued deterioration all over the world.The Middle Class is shrinking and growing poor by the day and it is not only the Poor Class that is getting affected.
January 2, 2012
2011 has been a bad year for emerging markets with high inflation,slowing growth and rising interest rates.Most of the problems are a consequence of the 2008 Financial Crisis when emerging countries increasing fiscal spending and reduced interest rates to reduce the affect of the Lehman crisis.Now the Bill is coming due with slowing growth and higher inflation.Most of the BRIC countries have heavily increased interest rates in 2011 to slow inflation as their poor population can ill afford the damaging effect of inflation.
Brazil has reduced its 2012 Budget by $32 billion to control inflation drawing howls of protest from politicians who always want to spend more as if money grows on trees.The country has reined in spending in both 2011 and 2012 to reduce the fiscal deficit and spend more money on productive sectors like infra.
June 30, 2011
China has increased the tax exemption limits for urban workers by 80% to $540 a month as soaring inflation and rising income inequalities has reached dangerous levels.Note increasing corruption and vast income inequalities have led to increasing incidences of violence and riots in the country.The prices of essential commodities like food and fuel have been increasing rapidly like in the rest of the developing world.Despite the central bank increasing interest rates,the prices have hardly moderated.Pork prices have touched new records making the life of the poorest quite unbearable.Note Gini's coefficient in China has reached 0.47 which is very high.While economic prosperity has increased,a vast section of the population remains poor.This is apparent in the fact that only 24 million workers out of 300 million urban workers earn more than $6500 per year .
April 10, 2011
India's Income Disparity is not growing among the rich and the very poor but also widening between its super rich and middle classes.Note India's Middle Class is not as big as a percentage of the population in the developed countries and its per capita income is also much lower.However India's Middle Class is growing as the economy grows by 8-9% and despite the lopsided economic growth some of the massive wealth that is being generated does trickle to the middle class.However those gains are being eroded by a Persistent Double Digit inflation which has entrenched itself.Despite periodic interest rate increases,India's Central Bank has miserably failed on the Inflation Front in the last couple of years.First it was having too loose a policy to overcome the effects of the global eco crisis in the aftermath of the Lehman collapse.Now it was too slow to raise rates as commodity price increased dramatically.
March 10, 2011
Income Inequality in India has been rising at an unprecedented rate in the last couple of decades.The opening of the Indian economy has led to even starker levels of income disparity among the very rich and majority of the Indian citizens.The Crushing Income Disparity is seen in the world's most expensive $2 Billion House set amongst 42% of the world's hungry children.The latest Forbes report lists 50 Indian Dollar Billionaires with 2 in the Top 10.A 2007 report by the state-run National Commission for Enterprises in the Unorganised Sector (NCEUS) found that 77% of Indians, or 836 million people, lived on less than 20 rupees (approximately US$0.50 nominal; US$2 PPP) per day.The living conditions of the majority have already fallen further with food price inflation between 10-20%.
March 4, 2011
Income Inequality and unemployment amongst white collar workers is a massive growing under-appreciated problem in India and China.These countries despite growing tremendously have built in severe distortions which are only becoming bigger by the day.Graduates in both countries increasingly find a massive demand deficit for their services while income inequality grows bigger as billionaires build billion dollar houses amidst people earning less than $2 day.
February 7, 2011
India's Fast 8-9% GDP Growth has become the envy of the developed world groping with anemic growth rates of 1-2% and rising sovereign debt burdens.Asia led by India and China are the new engines of growth of the global economy.However a close examination of the growth shows the rising strains and inequality.Most of the growth in India has been a jobless one with capital intensive sectors leading the way.While some service sectors like the IT and BPO Industry have also grown at a rapid pace,it has only affected a minuscule portion of the Indian population.The rest continue to wallow in misery and poverty which is reflected in the growth of Naxalism.India's education infrastructure is quite woeful with majority of graduates unemployable.This has led to a growing army of unemployed half education youth fighting to get low end jobs.Unlike China,India's industry forms just 30% of India's GDP and majority are still employed in agriculture.Most of India's service industry too constitutes of low value add,low paying jobs.With growing communication and information,the few good low end jobs on offer leads to a desperate jostling.Public sector jobs in railways,paramilitary are especially lucrative offering job security and a decent social position.This has led to increasing clashes.
November 16, 2010
India's Relations with its Neighbours in South Asia has mostly been strained despite sharing a common history and culture.While China and Pakistan remains India's topmost concerns with 4 wars being fought with these 2 countries in the last 65 years,the other smaller neighbours have not always been too friendly.However things seem to be improving with Bangladesh which is completely encircled by India on 3 sides.Bangladesh has viewed Big Brother India with suspicion despite India playing a crucial role in Bangladesh's Liberation from Pakistan during 1971.However the Bonhomie since 1971 was lost as subsequent military rulers and the BNP ruled coalition viewed India as an adversary.However the coming back to power of Shiekh Hasina led AWP has put India and Bangladesh on a new level.The reasons behind India-Bangladesh closeness are due to
September 10, 2010
Inflation continues to rule in the double digits as price of essential food commodities touches new highs.The Federal Government has stopped doing anything promising lower inflation figures in the next months thanks to lower base effect.However absolute prices as compared to 2 years are up almost 30-50%.The High Inflation has not affected the elite Indian classes as Stock Market make new highs and Industry maintains high growth rates.Naxalism is the direct outcome of this huge income inequality which is increasing every day.With no corrective measures being taken except some photo-ops by India's oppurtunistic politicians except internal strife to Increase in India.