Why Does the Fed Not Raise Interest Rates?

EconMaters writes:  We are not talking about raising the Fed Fund’s Rate to 4% we are just talking about raising rates more in line with basically a normal functioning economy growing at 2 plus percent on an annual basis with an unemployment rate in the fives. If the Federal Reserve cannot raise rates after 7 long years, this either says a lot about their lower rate and QE strategy in the first place, i.e., it hasn’t worked, or they need to quit making excuses and raise the freaking rate already. This has gone on long enough; I want the Federal Reserve out of financial market manipulation with absurdly idiotic interventionist policies. There is something seriously wrong if the Federal Reserve cannot raise the Fed Fund’s Rate a measly 100 basis points after 7 longs years of ZIRP! Seven years is an entire business and economic cycle, shoot the economy has been at ZIRP for so long it literally could cycle back to recession just because it has been so long, and business cycles have normal patterns of growth and contraction, we did study this in business school, this is economics 101!

Interest Rates?

Nobel Prize Gender Gap

May-Britt Moser, who jointly won the Nobel Prize in Physiology or Medicine in 2014 was only the 46th female Nobel Laureate.

Since Marie Curie has been honoured twice, a total of 45 women have been awarded a Nobel Prize since 1901. The chart below shows a gender breakdown of all individual (non-institutional) Nobel Prize winners since the award’s inception.

Nobel Prize Gender Gap

Grace Hopper Panel Doesn’t Dent Sexism in High Tech

At the Grace Hopper conference, no one had much to say about the sexiam in high tech,

The panel consisted of Facebook CTO Mike Schroepfer; Google’s SVP of search Alan Eustace; Blake Irving, CEO of GoDaddy; and Tayloe Stansbury, CTO of Intuit. The assembled white men set out to tell the audience what their companies are doing to make women more welcome and how men and women (yes, that’s right—women, too) can change the boys’ club culture in tech.

Instead, they ended up reinforcing many of the stereotypes women are already all too familiar with. In essence, their advice to women was: Work harder, build great things, speak up for yourself, lean in. It got so bad that at one point, the audience started heckling the speakers.

Women in High Tech

Modi to Modernize?

Dhiraj Nayyar:writes:   In India, Modi needs to clear away the sobwebs choking the legal and business sectors.  The real problem involves a raft of laws that lend themselves to exploitation, impeding business and government efficiency even today.

the government has now picked out 287 such measures, most of which are ludicrously outdated. One says that property in a certain part of Kolkata, one of India’s largest cities, can only be sold to the British East India Company. Another bans flying kites or balloons without police permission, because these constitute aircraft according to a 1934 law.

Such colonial-era rules may make for good comedy. But, of course, most of them are never enforced. The real problem involves a raft of laws that lend themselves to exploitation, impeding business and government efficiency even today.

Three prominent Indian think tanks — the Centre for Civil Society, National Institute of Public Finance and Policy and the Vidhi Legal Centre — recently released a report called the Repeal 100 Laws Project that identifies several such regulations. The Indian Boilers Act of 1923, for instance, requires that government inspectors certify the fitness of steam boilers in Indian factories. Originally meant as a health-and-safety measure, the law has essentially become an instrument of extortion by bribe-taking inspectors.

 Modi Reforms

Why Don’t Men Listen to Women?

Amanda Bennett writes:  What happens when a man’s casually assumptive, visceral reflex that nothing said by the woman sitting next to him could possibly be as interesting as anything said by the man sitting across the table extends — as it still does — to the absence of women’s voices in decision-making?

What do we lose?

Well, at the very least, I think the guys seated next to me lost a chance to have a more interesting evening. I’m not famous. I’m not important. But I do have ideas about things, and I am cheerfully willing to banter. And just imagine what was lost to the guys who years ago droned on to a certain woman who later novelized the experience of being “seated forever, trapped between two immensely powerful men who think it’s your function as their dinner partner to draw them out. You ask them about the SALT talks. You ask them about the firearms lobby. You ask them about their constituencies. You ask them about the next election.” Uh, that was Nora Ephron, guys. “Sleepless in Seattle” Nora Ephron. “When Harry Met Sally” Nora Ephron.

The SALT talks? Really?

What if NFL Commissioner Roger Goodell had thought well enough of the voices of women when it counted? Would a woman have said: Hey, hold on a minute. Let’s think about the 45 percent of our fans who are women and might be able to picture how they would feel if they were cold-cocked in an elevator?

Well, he’s hearing those opinions now. And he’s hearing them because women are telling them. Only he’s having to hear it on places like ESPN, from women such as Hannah Storm, who spoke recently of the effect of the Ray Rice video on her three daughters: “I spent this week answering seemingly impossible questions about the league’s biggest stars,” she said last month. “Mom, why did he do that? Why isn’t he in jail? Why didn’t he get fired?”

There’s nothing new about the fact that a woman like Storm is a sports anchor with a powerful platform. There’s nothing new about the fact that women take issue with the decisions of men in power. What is new is that many more women like Storm are becoming increasingly confident and, yes, feeling entitled to say: You didn’t ask for my opinion, but I have one. And it’s worth something. Would it save some anguish if we skipped some steps and moved them a bit further up the decision-making chain?

In any case, I’m grateful to Storm for showing me something. At the end of another D.C. event, I turned to my table-mate in mild exasperation and said, “We’ve been at dinner for two hours, and I know everything about you. I know where you went to school, how you got into business. I know your views on the nonferrous metals industry (not his real business) that is your passion. But you don’t know one single thing about me. Why not?”

His matter-of-fact answer: “I talked. You listened.” He didn’t deny he wasn’t listening. But neither was I speaking. I had a voice. I just wasn’t using it.

Do Men Listen to Women?

Egyptians Optimistic About Future?

Mohamed Younis writes:  After a tumultuous year of political turmoil, violence, and at times international isolation, Egyptians seem to be turning a corner. The percentage of Egyptians who rate their lives poorly enough to be considered “suffering” has been cut in half, dropping to 16% this June, one year after hitting a record high of 34%. At the same time, the percentage who rate their lives highly enough to be considered “thriving” has nearly doubled over the same time period, rising from 9% to 17%.

Egypt 2

Dollar Gains on Yen

  • US dollar has gained 7% against yen since August
  • Japan PM Abe uneasy with sudden yen weakness
  • Incremental rise in Japan’s sales tax possible

​On September 19th USD/JPY reached highs of 109.46 not seen since early 2008, after one of the busiest weeks in currency markets all year. The greenback has gained almost 7% against JPY since August, a move that can be pinpointed to have begun on August 28th when the gross domestic product figure for the US came in at 4.2% in the second quarter, compared to the -2.1% that had been printed in the previous quarter.

Dollar Gains on Yen

Swiss Lead World in Financial Assets

Global financial assets now stand at a record €118 trillion. Swiss households hold the greatest slice of this wealth, with net financial assets per capita of €146,540 when real estate assets are excluded. The United States and Belgium are in second and third place with net per capita financial assets of €119,570 and €78,300 respectively.

Assets

Russia’s Banking Sector Under Pressure

Ben Aris writes from Moscos:  Five of Russia’s six largest banks are now on the US sanctions list, which is hurting the whole sector and could eventually precipitate another financial crisis.

Russia’s largest lender, the savings bank Sberbank, was included in a new sanctions list for the first time in September. It joins its sister state-owned banks VTB, which concentrates on corporate financing; the retail specialist VTB24; Gazprom-owned Gazprombank; Bank Moskvy, which was acquired from the City of Moscow in 2011 by the VTB Group; and Russian Agriculture Bank (Rosselkhozbank), which finances the agricultural sector.

Sanctions are being imposed an already extremely sick sector and will only add to the deterioration. Cut off from international capital markets and an economic malaise at home depressing retail deposit growth, the sector is currently being supported by the Central Bank of Russia (CBR). Lending by the CBR is approaching levels last seen during the blackest days of the 2008-09 crisis. The government has already been forced to recapitalise two state-owned banks – VTB and Russian Agriculture Bank – and is pouring more money into the sector.

A recent report from Standard & Poor’s says that Russian banks have sufficient resources to weather the storm for now. “We believe that the credit quality of Russian banks will not suffer immediately from the restrictions on tapping EU and capital markets. Our analysis suggests the sector has enough liquidity to refinance its international debt falling due until the end of 2015,” the rating agency says in a September 18 report entitled, “Sanctions Will Increasingly Weigh On Russian Banks’ Funding And Liquidity Profiles.”

However, it adds that, “the longer restrictions on capital market access last, the larger funding imbalances will become, potentially calling into question the banks’ capacity to adequately finance the economy.”

While the list of sanctioned banks is short, they still represent more than half of all Russia’s banking assets. Luckily, following the 2008 crisis Russian banks became a lot more cautious in their borrowing and are not heavily exposed to international lenders. S&P estimate that banks total external obligations for the 2014-15 is $57bn, which they should be able to cover from their liquid reserves and maybe with some help from the CBR.

Impact of Sanctions

Flipkart Versus Amazon in India

Samidha Sharma writes:  The e-commerce war is playing out hot and heavy between Amazon and Flipkart ahead of the much-storied US e-tailer’s founder Jeff Bezos’ visit to Bangalore.

Sources told TOI that Flipkart is executing what it calls the ‘Welcome Mr Bezos’ campaign. The company has put up huge billboards at the airport, highways and close to Amazon’s headquarters – places where the communication is sure to hit Bezos’ eyes – for its festive season sale campaign called Big Billion Day. The communication will follow Bezos to Delhi where he is scheduled to go next, sources privy to the matter said.

Flipkart, which is fighting an all-out battle with Amazon, is looking to send out a message to its arch-rival that it’s the number one e-tailer in the country. Sources said Flipkart is also running a ‘Project Victory’ campaign within the organization, a celebration of what it calls a win in the first round of war with Amazon.

When asked about Flipkart’s response to Bezos’ visit, Sachin Bansal, co-founder of Flipkart said, “It’s a panic reaction to the fact that Amazon is not able to make any inroads in India. Our market share has increased in the last six months.”

Flipkart, founded by two ex-Amazon employees Sachin and Binny Bansal, is moving rapidly towards touching $2 billion in annual sales (known as gross merchandize value in e-commerce industry) while Amazon is moving close to the billion-dollar figure. Delhi-based Snapdeal, the other big player, is also at about $1 billion in annual sales.

For the Seattle-based $75-billion Amazon, India is an extremely crucial market, which was signalled by Bezos’ announcement of a $2 billion investment two months back. That statement came just a day after rival Flipkart raised $1 billion in a new financing round, valuing it at $7 billion.

Having started its marketplace in June last year, the online retail juggernaut has been doubling down on competitors with top dollars being put in to advertising, heavy discounting and bringing on new merchants and sellers on to its platform. It bought the sponsorship for the Indian Premier League cricket tournament and unleashed a price war, taking the challenge right up to Flipkart. Over the past few months, though, Flipkart went on an overdrive with exclusive tie-ups with mobile phone makers like Motorola and Xiaomi even as the Myntra acquisition gave it a leg up in the fast-growing apparel and fashion space.

The war between the two players has only just begun and Bezos’ visit will simply help fuel the e-commerce fire.

Amazon versus Flipkart in India