Tuesday, November 23, 2010

QE II and the recovery story: Is it time for austerity?

(The article was adjudged the best entry at Consilium – The Policy Design Competition at IIM Lucknow)
Quantitative Easing II better known as QE II has been globally the most  discussed phenomenon in the recent times. Through this mechanism the US Federal Reserve will buyback 600 bn US$ worth  of bonds, at about 75 bn US$ a month, and infuse newly created money in the system. The buyback follows the QE I that saw an infusion of 2 trn US$.

The step can lead to lowering of interest rates or yields in the US thus incentivizing investors to look for greener pastures abroad that provided greater returns. Considering the deflationary concerns in the US and the unusually high unemployment rate, “doing nothing” was not an option for the regulators. With Chinese not allowing Yuan to appreciate to the levels acceptable to the US, Fed through QE has taken it upon itself to undo the “trade imbalance”.  QE through lowering of interest rates aims at spurring demand as well as consumption. This will generate jobs as well as lead to appreciation of asset prices which have touched new lows thus leading to foreclosures and defaults. As far as global economy is concerned, even they can benefit through FII inflows.

Tuesday, November 16, 2010

Bihar: The road-map to prosperity

For the past few weeks, I have been going through various panel discussions, books, blogs & news articles, both national and international that had some relevance or relation to Bihar. Through this blog dedicated to Bihar, my focus will be on laying out a roadmap for a prosperous Bihar. I will include the findings from the above exercises as well as inputs from discussions that I had with my Bihari as well as non-Bihari friends. Let us now start our expedition.

Thursday, November 4, 2010

The Marketing of a Movie

The idea for writing this blog came after I had an almost-live experience of coming across a press conference of the Akshay starrer Housefull (though I sensibly avoided it) when in Ahmedabad. In this blog I would discuss the different stages and ways in which buzz about a movie is created i.e. how a movie is marketed? I would limit myself to only those aspects that pitch the movie to the audience rather than a director pitching it to the producer or to the movie star.

Let’s take the first step of this journey which is also known as the muhurat or the launch. The first few selling points could be the star couple, launch of a new star son or daughter, the acclaimed director or coming together of the pairs rarely seen together. Subhas Ghai’s Saudaagar that saw late Raj Kumar pitted against Dilip Kumar generated a lot of interest as historically as per rumors ego-clashes kept these actors from acting together.  The example of Saawariya that sank without a whimper but was in the news regularly due to launch of Ranvir and Sonam is a case in point. The off-screen chemistry or gossips about the lead couple have been traditionally exploited to create a much needed first impression. The prestige of the occasion is measured by the quality of the audience rather than its quantity i.e. which celebrities made it to the launch.