Category: Your Money

Europe!

German Logo of the ECB.

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It appears that the EU is fast approaching the end-game. The Germans will not allow the ECB to print money and buy bonds. And neither will they allow PIIGS to default and quit. The only thing left on the table is tighter integration where austerity coupled with a transfer union will stabilize the Euro. The Germans seem to be hell bent on a treaty change and a move towards a fiscal union with tighter budget controls, even if that means removing democratically elected governments and replacing them with ‘technocrats’ favorable to Germany.

With Italy in dire straits, it appears that IMF has chalked up a $800 billion loan in case its debt crisis worsens. The funny thing is the largest contributor to the IMF is the US (18%). Wonder how that would go down with the Congress. But rumors of the IMF loan to Italy has sent stocks soaring, for now.

Since the US is going to be on the hook anyways, why not allow Uncle Ben to buy up all Euro debt? Maybe the only response to the current existential threat to Europe would be for the Fed to print dollars and buy up, say, €2 trillion of bonds? If it is presented as a choice between printing and fascism, Bernanke might just get away with it.

The fact remains that the world desperately needs the West to reflate.

Sunder’s List : The Economist Special

Eurozone_interest_rates, source of data: http:...

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A lot of good articles in The Economist:

At some point a listing ship topples over, and Germany would plunge into the sea with everybody else.

Government bonds have turned from offering a risk-free return into becoming a return-free risk: Gloom descends

The rupee is a “drama queen”. No: Euro-zone banks supply about half of India’s foreign loans.

If you make it too hard to fire employees, companies will stop hiring and automate the shit out.

Sad, but true: Both as entrepreneurs and as employees, women still seem to be at a disadvantage.

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Fiat India–Nice cars ruined by Tata Motors

Fiat 1100-103, 1954

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Note to self: no matter what, do not outsource customer service.

Fiat has a decent lineup of cars in India. However, they have been extremely unlucky in choosing an Indian partner. Fiat cars were one of two models that were available during the dark days of the license-permit raj. Their earlier models (more than 30 years old) are still used as taxis in Mumbai. Why is it that given a choice, most people would not buy a Fiat now? I guess the answer is fairly simple: poor customer service.

Back in the 90’s Fiat partnered with Premier motors to introduce the Uno. I remember my dad “booking” a vehicle and waiting for over six months to actually take delivery. It was a complete disaster in terms of service levels. Parts were unavailable, mechanics did not know how to service the vehicle and there just weren’t many service centers accessible. Fast forward to 2011 and they are still where they were 20 years ago, except that they now have Tata Motors screwing things up for them.

How do you expect a partner to do a good job servicing your product when the same partner has equivalent models competing under his own brand name? No wonder Fiat gets a step-brotherly treatment. Ask me, its two weeks and counting to get parts for my Linea. Pathetic.

Sunder’s List

Passing the Euro: from Merkel (‘unfuckable lard-arse’ – Berlusconi) to Sarkozy (‘leave Sarkozy alone, he’s crazy’ – Berlusconi) to Monty (‘Super Mario’)

Screen shot 2011 11 24 at 5 55 02 PM

 

India threw open its $450 billion retail market to global supermarket giants on Thursday (Reuters)

China has been forced into self-help mode after a series of international crises have hollowed out its export markets (Reuters)

Germany – the only first class passenger on the Titanic? (FT)

Asian banks and businesses are seeing their borrowing costs climb. Bad news SBIN? (Reuters)

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Sunder’s List

The short of it: The US can’t agree on its finances. Europe is circling the drain and China is slowing down, dragging down Australia with it. And India is busy pouring money drown the drain.

Euro zone industrial new orders slumped in September the deepest fall since December 2008 (Reuters)

Warning to Germany and France: Build a Barrier at the Alps (Atimes)

Germany & France haven’t figured it out yet. (Reuters)

Economies in the Asia-Pacific region appeared isolated from the turmoil in other parts of the world, but cracks are appearing. (NYT)

China is facing its worst wave of labour unrest. (CNN)

Chinese factories battled with their weakest activity in 32 months in November. (Reuters)

Chinese banks are “extremely fragile” because the lenders don’t have enough capital to offset bad loans. (Bloomberg)

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