Macro: All good things must end

15 Aug

End of stimulus party : It’s time to sober up

While the EU is struggling with the side effects of imposing austerity, US is yet to start on the path. A high ratio of Debt to GDP is a death trap and it is just a matter of time till some common sense prevails and fiscal tightening begins. Mr. Bernanke has given some hints about ending or reducing the QE by June and as usual, the markets have thrown a fit about this and the prices have started falling . Next thing the analysts will say that the sky is falling and  a correction was imminent.

What the hell is Japan doing?

It is ignoring the trend of austerity and reduction of Debt by providing a big dose of stimulus to its economy. Popularly called Abenomics after the new leader, this new policy will definitely change Japan. However, what remains to be seen is that whether this change will be good or bad.

India : Congress thinking of early elections

Congress seems to have completed 9 years in power. It is a big achievement for the party and I would say that things could have been much worse if we had to witness frequent elections instead of one party staying in power. However, much remains to be done yet of the reforms that had been promised. As optimistic as the rating agencies, i would still give congress a 2 out of 3 chance of delivering on its promises. The remaining 1 out of 3 chance clearly spells doom and a fate of junk rating for India.

Quest for Value

Price is Everything. Price changes Everything

Fundoo Professor

Thoughts of a teacher & practitioner of value investing and behavioral economics