Swiss Bank Robbery

Swiss bank is the term which we hear at the time of elections and no one talks about it once the elections are done. But this time BJP seems to be bringing up this issue in a big way. Advani had earlier written about this to PM but didnt get a proper reply. So now he seems to have advised all the state government CM's where NDA sthe government to write to PM to make him talk about it in the G20 summit.

So what is in a Swiss bank system and how is it affecting us? There are plenty of Swiss banks like UBS and Credit Suisse that operate under the Swiss law with bank secrecy policy. Swiss secret accounts are like any other accounts except that no one other than the account holder has access to the account.

Especially, the government of the country wont have access to it. Specifically the laws of the swiss banks are defined so as to attract black money. Since there is no tax on the income and government wont have access to it, nobody will get a sniff of the money deposited there.

Swiss banks take away wealth from us and therefore they have to be penalized for investing into our markets. That is just common sense. The question to be addressed is why the government has given the FII status to these banks? By approving aren’t we encouraging more citizens to invest in Swiss banks, which is like our competitor? Providing FII/FDI status to Swiss banks is like slapping our own face. We are letting our own wealth to enter through back door.

Since the issue is raised by political parties now its left to us citizens and mainly the media to keep the issue alive and bring back our money back to our country.

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Future of Telecom - Reliance Communications

RCOM added 3.4 million subscribers in February 2009, maintaining the lead in monthly net new subscribers post its GSM launch in January 2009. February additions indicate strong momentum for RCOM . The GSM launch had seen a huge surge in the subscribers over the last two months and this is expected to continue in the coming months. Also, the MNP implementation also should help the company although it may take some time to be launched.
This is expected in CY09 will open up the GSM post-paid market for new GSM operators like RCOM.

The valuation of the scrip now is very attractive now. The scrip is down by over 70% in the last one year. RCOM is currently trading at 20-40% discount to Bharti.

deflation staring at India

India is staring at negative inflation. The last week inflation ended at 0.44% indicating that in a few weeks India might see disinflation. So the question in everybody's mind is why is it bad? We all know that high rate of inflation is very bad so why is it that when we see negative inflation it is considered bad. After reading this article you will get to know the reason.

As all other things, anything extreme is bad. This is the same with inflation. If the inflation is high or if it is in negative it is bad. First, lets see what is inflation and how is it calculated.
Inflation measures how the index for a particular week looks vis a vis what it was exactly a year back for the same week. For eg: 0.44% inflation means prices for 1st week ending March 7 2009 rose by only that percent compared to that of March 7 week of 2008. It is a common misconception that decreasing inflation means that the prices are decreasing. This is not the case because inflation is the value by which the value has increased while compared to previous year. So if you want to see the prices falling then it would be the case when there is negative inflation.

Another term that is normally used along with disinflation is deflation. But both are completely different, even though one of them might lead to another. Disinflation is negative inflation. But deflation is even more dangerous. Deflation means falling economy. Disinflation only means falling prices, however the economy is still running but with a slow pace. Presently India is staring at disinflation and not deflation.

Anyway prolonged disinflation may lead to deflation. This can happen because when there becomes a predictablity of falling prices then everyone would like to postpone their investments as they would get the same at the lesser price by delaying it. This will start hurting the economy. So even though everyone may be rejoycing that soon the prices would be falling, smiles will be short lived. If the same continues we may be staring at deflation and if it doesnt then again its isnt good news.