The IMF’s downward revision to global GDP growth – it’s not all bad news.

Cheap oil: check. Low interest rates: check. Benign inflation: check. Easy liquidity: check. Growth: ?

Despite lower input prices and relatively stable markets, global economic growth prospects remain subdued. That is if one were to go strictly by the headlines relating to IMF’s latest update to its World Economic Outlook, published on 20 January. Key changes from its original estimates for 2015 and 2016 growth estimates of October 2014:

World Output Trend

Data source: IMF

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Bitcoins Part II

Bitcoins Part II

In our last blog we introduced basics of anBitcoin interesting concept called “cryptocurrency” and discussed about Bitcoins. In this article, we are broadly discussing practical aspects of Bitcoin. This blog should be a worthwhile read for anyone wanting to diversify his (or her) portfolio into this new world.

What is the real worth of Bitcoins?

Before starting the investment process, let us first talk about real worth of Bitcoins. Bitcoin investment is a gamble similar to betting on a new technology. There is a chance that bitcoins would be worthless after a while. But there is also a greater chance that Bitcoins would take up at least part of gold’s traditional role as store of value. If this second argument holds true, one may gain significantly, in next few years, by investing in Bitcoins. The gains may be hundreds of times compared to the current value of Bitcoins. It’s a lottery ticket, in that sense, but perhaps has better chances.

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ECB Quantitative Easing

The Quantitative easing programme from the ECB is here, will it be sufficient to save the Euro zone?

The world will closely watch the ECB (European Central Bank) monetary policy meet today. There are several things that make this policy meet unique from the usual meets that any central bank convenes.  Firstly, it is the wide spread consensus of a stimulus announcement that the streets have already discounted, on the lines of the statements issued by the ECB president Mario Draghi in the previous policy meets and press conferences. Another unconventional thing this time is the quantum of the stimulus. There is a widespread consensus the ECB can come up with a bond buying programme roughly around 600 billion Euros to rescue the sluggish economy and steer inflation near its target.

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Currency Valuation- Arithmetic Simplified

Currency Valuation- Arithmetic Simplified

How many of us used to notice or talk about rupee levels until 2008 when rupee became a victim of US Sub-prime crisis and depreciated massively from the level of 40 against the US dollar to almost 50 in less than a year. The Indian rupee continues to depreciate against the US dollar and has fallen over 30 percent since 2008 with a couple of spikes in this run-up at times of global distress when India witnessed significant capital outflows. Now when it comes to rupee, every one of us has a level and view to contribute to. But rupee valuation still remains a mystery to masses in financial society.

First, let us look at one very important aspect of currency arithmetic. If asked, how much is rupee depreciation in a period when rupee moved from a level of 40 to 60 against the US dollar, the most obvious answer would be 50 percent. However, the correct answer is 33.3 percent rather than 50 percent as the US dollar is quoted against the rupee not the other way round. So we can say that the US dollar has risen by 50 percent against the rupee but that does not mean that the rupee has depreciated by 50 percent against the US dollar.

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Rajan’s festival surprise for the markets

A surprise rate cut in festival season – so what prompted the RBI’s belated benevolence?

Financial markets were taken by surprise on Thursday as RBI made an out-of-turn policy rate cut announcement around noon (reducing the benchmark repo rate from 8% to 7.75%). Markets responded enthusiastically with the Nifty climbing over 2.6% and rate sensitives gaining even more:

INDEX% ∆
CNX REALTY8.32
CNX FINANCE4.52
CNX PSU BANK4.48
BANK NIFTY3.40

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Bitcoins Part I

Bitcoins Part I   Bitcoin is the first decentralized peer to peer Bitcoin crypto-currency payment system. The “cryptocurrency” concept was first highlighted in 1998 by Wei Dai. The concept is to use a different form of currency that uses cryptography to control transactions. The concept was successfully implemented by Satoshi Nakamoto in 2008/09. Continue reading

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