Category Finance

America’s decade of dread

Financial decline of US in this decade is not a sudden one.It is the result of years of faulty planning and lopsided priorities.There used to be a time when middle class moved up the ladder and additional people from middle order still moved up because they had room and Govt. policies stimulated this phenomenon.Now middle class ,having moved up did not pull additional people from the same group nor does the Govt. of any help.;Govt. is busy pampering the already settled neo rich, with an eye only on the stock market, forgetting that stock market participants form only a minuscule of population.Stimulating other sectors more, if not equal to financial sector is called for.
Conspicuous consumption is to be reduced.Use of plastic money is to be discouraged.
Savings is to be promoted by offering incentives.Luxury items are to be taxed.Cap on individual income in Corporate sector is necessary.
Import is to be reduced.Above all live within means and do not live to day as if there is no tomorrow

Dubai World-Fiasco,Banks in a bind.

In Sanskrit, there is a saying "Mounam Sarvaartha Sadhagam",general meaning being Silence is conducive for achievement in Life;special meaning is Silence is conducive to worldly wealth.
In Dubai , the ruling class maintained a discreet silence when people invested in Dubai World, thinking it has Royal Patronage(they are right for in Sheikdoms nothing will move with out the Sheikh's participation) and came out the govt. has nothing to do with Dubai World when the bubble burst.
RBS had earlier been bailed out secretly by the UK govt.How these banks are going to come out of this mess is an open question.
Ultimately, the small investors are going to be hit as usual.