Breaking the hiatus: RBI, Michael Pence

I had joined the IFMR Business School as its Dean, as of October 4.  It is located at Sri City in Andhra Pradesh. I arrived at Sri City campus on October 1 and the last week has been a blur. But, blogging is a refuge. I think I had mentioned it once before.

You can watch the interview I gave to ET NOW Television on RBI monetary policy decision on Friday. I was part of a panel. I did not fault their rate decision on Friday. It was a fine call. They took their chances. The stock market appeared not to like it. But, it has fallen the day before too. In any case, it was so rich in valuation that it deserved to fall. Establishing causation for such short-term action when the market was anyway overvalued is problematic. Did the market expect RBI to cut rates or raise rates?

But, I felt that they should have offered more substantive comments on the IL&FS, if not on Friday, but on another occasion.

Before the interview, I managed to go through the monetary policy report and the press statement in the long car ride from Chennai city to Navalur in Kancheepuram District (OMR).

Michael Pence’s speech on China requires careful reading. I had not done so yet. It is an  important and calculated escalation.

We can do without headlines of this nature. The Federal Reserve Chairman does not exist to serve the stock market investors.

 

Leadership and credibility

My comment on Andrew Hill’s article on leadership credibility:

Mr. Andrew Hill is right that President Trump will not be able to, ever, gain credibility with his critics. But, what I do not know is whether it is his failing or theirs.

With Trumps’s personal conduct, the charges against him are a mixture of truths, innuendoes, sly suggestions, evidence-free and unproven allegations. So, his personal credibility is low with those who believe in these allegations. Some are indifferent because there is, so far, smoke without fire and for his supporters, they do not matter.

The question of double-standards on the part of the critics bothers many neutrals and that dilutes the credibility of his critics, substantially.

As for his role as the President, many – including his critics grudgingly admit – have now conceded that he lives up to the agenda or campaign promises. He has done so more than any other recent President has done – Republican or Democrat. That should actually enhance his credibility, whether we agree with that agenda or not.

Coconut oil

Came across this article in ‘The Guardian’ on Coconut oil. A professor at Harvard calls it ‘pure poison’.

A friend of mine who is a Cardiac specialist and surgeon wrote back:

“We have been using coconut oil for many centuries without any mishap. Whole of Kerala is using it and so many Pacific islanders do use coconut. Think the west is trying to undermine us! Our forefathers were clever indeed!”

Another friend sent me a link to this effective speech by Dr. B.M. Hegde on coconut oil. Dr. Hegde, in that six-minute speech, mentions an Institute that he has co-founded. You can find it through this link.

Another friend wrote in to say that he would trust B. M. Hedge over anyone else anyday.

One more friend – who always gives me a complex whenever I talk to him – shared the following information and insight with me:

I have read a lot of stuff on food and the only 2 things I have concluded are 1) a Mediterranean type diet is good, and 2) concurring with Michael Pollan’s pithy advice ‘Eat food. Not too much. Mostly plants’

I think Pollan is the Atul Gawande of food writing. I love his description of edible food like substances (high fructose corn syrup and other products of food science) which he contrasts with real food.

He added:

‘In defense of food: an eater’s manifesto’ is the one with the pithy advice; his preceding book ‘The Omnivore’s dilemma’ was good and his most prescriptive book is ‘Food rules’ which followed ‘In defense of food’.

I think coconut oil has already benefited me a lot, as you can see from the information I was able to gather from friends.

Personal update

I was travelling from the 17th August to 22nd August. Came back to Singapore and it has not been this hectic in a while.

I am taking over as the Dean of the Business School of the Institute of Financial Management and Research (IFMR), located at Sri City in Andhra Pradesh. One takes NH 16 from Chennai to get there. It is little over 80 kms. from Alwarpet or Anna Salai – Gemini Circle. I start on October 4.

IFMR is the sponsoring body of the Krea University.

Not sure if I will find time to blog as avidly and regularly as I used to do all these years. Will find my way around it for it is an outlet and refuge for me.

Not that many missed my blog posts this past week 🙂

Why do I write

Came across this from Frank Partnoy (yes, I am not done with Partnoy, yet!)’s twitter handle.

This is by George Orwell on why he writes.

He lists four purposes for writing:

Putting aside the need to earn a living, I think there are four great motives for writing, at any rate for writing prose. They exist in different degrees in every writer, and in any one writer the proportions will vary from time to time, according to the atmosphere in which he is living. They are:

  1. Sheer egoism. Desire to seem clever, to be talked about, to be remembered after death, to get your own back on the grown-ups who snubbed you in childhood, etc., etc. It is humbug to pretend this is not a motive, and a strong one. Writers share this characteristic with scientists, artists, politicians, lawyers, soldiers, successful businessmen — in short, with the whole top crust of humanity. The great mass of human beings are not acutely selfish. After the age of about thirty they almost abandon the sense of being individuals at all — and live chiefly for others, or are simply smothered under drudgery. But there is also the minority of gifted, willful people who are determined to live their own lives to the end, and writers belong in this class. Serious writers, I should say, are on the whole more vain and self-centered than journalists, though less interested in money .

  2. Aesthetic enthusiasm. Perception of beauty in the external world, or, on the other hand, in words and their right arrangement. Pleasure in the impact of one sound on another, in the firmness of good prose or the rhythm of a good story. Desire to share an experience which one feels is valuable and ought not to be missed. The aesthetic motive is very feeble in a lot of writers, but even a pamphleteer or writer of textbooks will have pet words and phrases which appeal to him for non-utilitarian reasons; or he may feel strongly about typography, width of margins, etc. Above the level of a railway guide, no book is quite free from aesthetic considerations.

  3. Historical impulse. Desire to see things as they are, to find out true facts and store them up for the use of posterity.

  4. Political purpose — using the word “political” in the widest possible sense. Desire to push the world in a certain direction, to alter other peoples’ idea of the kind of society that they should strive after. Once again, no book is genuinely free from political bias. The opinion that art should have nothing to do with politics is itself a political attitude.

He goes on to conclude like this:

Writing a book is a horrible, exhausting struggle, like a long bout of some painful illness. One would never undertake such a thing if one were not driven on by some demon whom one can neither resist nor understand. For all one knows that demon is simply the same instinct that makes a baby squall for attention. And yet it is also true that one can write nothing readable unless one constantly struggles to efface one’s own personality. Good prose is like a windowpane. I cannot say with certainty which of my motives are the strongest, but I know which of them deserve to be followed. And looking back through my work, I see that it is invariably where I lacked a political purpose that I wrote lifeless books and was betrayed into purple passages, sentences without meaning, decorative adjectives and humbug generally.

On Adam Smith

There is a nice article in ‘Aeon’ magazine on Adam Smith. The article is better than the review prof. John Kay wrote of a new book on Adam Smith which, I think, is similar to the article above.

But, the book itself might be richer in content than the review suggests. So, my comment on the review is not a comment on the book. Perhaps, the article in Aeon and the book might be convergent.

The important message from the article above is that Smith was not so much against state intervention as he was about ‘State capture’.

Further, there is the unnecessary obligatory reference to Donald Trump in Prof. John Kay’s article. Not needed at all, in the context of the article. John Kay too does not need to conform. If so, he would not have written ‘Other people’s money’ and authored the report on UK Equity Market Reforms. Just shows how powerful the tendency to conform to conventional wisdom is.

Wrong solution for a distant problem

I was happy to read Harsh Vora’s piece and it is good that he was thinking far ahead – 10 to 20 years down the line.

I just have the following comments:

The case for freer capital flows, however, does not follow from his argument. If global economies are in a far advanced state of demographic decline – which they are – how do freer l capital flows help overcome the low natural rate of interest problem induced by the aging of the population?

Second, in India’s case, it will still be a developing nation and potential GDP growth improvements will occur through many other channels. In advanced nations, their potential growth is already exhausted. It is between 0.0% and 2.0%. The demographic transition to old age compounds the situation. It is not so in India.

Third, even if the supposed benefit of freer capital flows is that it allows the country to circumvent the domestic interest rate ceiling imposed by aging population is true, it comes with other bigger costs. Monetary policy autonomy is gone, in the presence of capital flows. It is the famous impossible trinity. In fact, it is an impossible duality. The exchange rate regime does not matter at all.

It might amount to burning down the house to get read of the bed bug.