Category: Your Money

Sunder’s List

Something to wake you up this morning.

The world financial system not only isn’t functioning, it’s on the brink of collapse – Soros

Are we headed towards  a cluster of sovereign defaults? Kyle Bass

Tired of Europe? Try the Chinese on for size: tightening credit and higher costs.

Here’s something that should keep INFY fans awake: low-cost cloud services will cannibalize up to 15 percent of top outsourcing players’ revenue. (Gartner)

The US muddles on: November manufacturing rose and retail hasn’t collapsed.


“I told you so”

“So although we didn’t join the euro…and, frankly, it’s showing to be a bit of a mess, the break-up of it would be very bad for Britain. So I spend a lot of my time putting pressure on other European leaders to come up with a solution that will actually make sure that there is stability and growth in Europe,” – U.K. Prime Minister David Cameron. (WSJ)

Urbanization is a Good Thing

Peepli Live

Image via Wikipedia

I watched this movie called Peepli Live, produced by Amir Khan. The story revolves around an indebted farmer who, facing a large debt, contemplates suicide. Its an interesting movie. However, right at the end, there’s commentary as to how millions of low-income farmers are being forced to forgo their (small) land-holdings and migrate to the city. Here’s the thing: I don’t see it as a bad thing that needs to be reversed. Rather, the role of the government and society should be to ease the transition.

Urbanization allows efficient allocation of public services. It is easier to serve a city with 10 schools rather than 10 small villages with 1 school. The problem is that by portraying urbanization as bad, subsistence farming as good we are trying to swim against the tide and misallocating capital (like the insanely evil NREGA.) We would be better off focusing on easing the transition that is already taking place by focusing on city planning.

Subsistence farming was never a good idea. Lack of scale and under-capitalization implies that millions of farmers in India lead a hand-to-mouth existence. We should be focusing on providing better options for livelihood generation rather than putting poverty on the pedestal and trying to wish the problem away.

Urbanization is a good thing and it is going to continue being a predominant trend of our times. Deal with it.

Sunder’s List: Dow +4.1%

Santa Claus' rallye team

Image by yourbartender via Flickr

Coordinated Central Bank Action fires up a rally of epic proportions: best day since March 2009. Things got so bad (rumors are that a giant European bank almost failed), that the US Fed decided to bail out Europe. The rest of the world is rallying on this sudden injection of liquidity, so watch for our very own NIFTY to spike. There maybe one more trigger to sustain this rally, the US job report tomorrow might surprise to the upside. Has the Santa Claus rally begun?

Money flowing out of India putting a brake on divestments? No problem, lets just ask State Owned Companies to buy back their shares! (FT)

Enjoy todays rally but keep an eye out for the exit.

Twitter: @SunderStockViz