Rollback of FDI in retail? Ridiculous!

What a sad day for the Indian retail sector. After announcing 100% FDI in retail, the Government today decided to put the proposal on ‘hold’ until a consensus is reached among political parties. The Governments decision to allow FDI in retail resulted in strong criticism from the opposition parties which have led to a logjam of sorts at the recent parliament sessions.  The opposition fears that the Governments proposal would result in loss of livelihood of the 12 million odd kirana [mom-and-pop] store owners.

I wrote about this in my earlier post wherein I mentioned how silly the opposition’s argument is. To reiterate, the kiranas would only integrate with modern retail. One has to keep in mind that about 75% of India’s population still earns less than $2 a day. So unlike in more advanced economies with high per capita income, kirana stores will continue to be a part of the Indian market given the shopping styles of consumers. The culture of shoppers to shop daily coupled with lack of storage space make the kirana store an integral part of the Indian middle class.

Not to mention the 6-8 million odd jobs that experts believe would be created if FDI in retail is opened up. A large number of MNCs would setup shop in India which would create a huge number of jobs, not just directly but indirectly as well [sourcing, logistics, etc]. Like Schumpeter has rightly pointed out in this post, if there is a paradise for multinational supermarket chains it must be India. The country boasts more than one billion inhabitants and an economy that is growing healthily. Its retail market is forecast to nearly double to $850 billion by 2020. It is also very fragmented with only very few supermarkets and no dominant chain.

The organized retail sector in India forms a measly 7% of the total retail trade. To improve this, it is critical that the sector is integrated with the outside world. And just when there was a ray of light, the UPA government has chickened out. What a shame!

Xmas Charting

Can't wait to unveil the daily chart. Wonder what's behind the 25th!

Happy charting

To stretch or not to stretch?

Being a workout addict but an absolute hater of stretching, this article comes to me as a breather. When it comes to stretching, I am probably the only one at my gym who cheats. Where fellow workout enthusiasts stretch for around 10-15 minutes, I wrap it up in less than 5 :). The fitness trainers at the gym always advise to stretch both before and after the workout, which I more often than not ignore. And I have no guilt. I can safely vouch for the research outcome mentioned in this article because trust me, I feel absolutely fine with my cheat stretching :)

Here is a gist:

Researchers at the University of Sydney in Australia reviewed dozens of recent studies of stretching, hoping to determine whether the practice prevents people from getting sore after they exercise. The authors found 12 studies completed in the past 25 years that looked directly at that issue. Most were small and short-term. But each produced essentially the same result, the review authors write, showing that “stretching does not produce important reductions in muscle soreness in the days following exercise.”

In a study, which was conducted by Robert D. Herbert, a professor at the George Institute for Global Health at the University of Sydney, who also wrote the comprehensive review, the rates of reported muscle soreness were similar regardless of whether the volunteers completed a standard 15-minute program of static stretching. About 32 percent of those who didn’t stretch reported sore muscles the day after a workout. About 25 percent of those who had stretched reported the same.

Other studies have produced comparable data, with one experiment cited by Dr. Herbert finding that static stretching before or after endurance exercise reduced volunteers’ self-reported muscle soreness the next day by a grand total of just half a point on a 100-point scale of discomfort.

“It does not mean that you should not stretch,” said Dr. Michael Fredericson, a professor of sports medicine at Stanford University and the chief physician for that school’s cross-country and track-and-field teams, who recently completed an online report about stretching. Try substituting jumping jacks for toe touches before a run, he says. “And if you feel frequent tightness” in certain muscles or tissues, like in the iliotibial band that runs along the outside of your knee, a common occurrence in distance runners, “then stretch those particular muscles after exercise to lessen your chances of serious injury.”

If you’ve never stretched, though, don’t feel obligated to begin now, Dr. Herbert says. “There is little evidence that stretching does anything important,” he says, “but there is also little to be lost from doing it. If you like stretching, then do it. On the other hand, if you don’t like stretching, or are always in a rush to exercise, you won’t be missing out on much if you don’t stretch.”

The King of Bad Times

If you go by media reports alone, the Vijay Mallya-promoted Kingfisher Airlines is just a step away from bankruptcy. It had to cancel over 200 flights over the past few days while its pilots are missing and suppliers are demanding immediate payment. As a result, the airline has knocked on the doors of the Government for a possible bail out. Like the Air India/ Indian airlines mess wasn’t enough for the Government to battle. It would be just a matter of time before other private airlines like Jet Airways, Spice Jet and Go Air who are all making losses come knocking.

In my opinion, the Government must not bail out private airlines like Kingfisher whose biggest problem is the large size of $ 1.3Bn debt on its books. Major part of this debt was to finance the buyout of Air Deccan. This is a self created problem which must be tackled by the airline on its own. The airline’s immediate cash requirement is estimated at $200 Mn. This includes dues to the private airports, AAI, oil companies and other vendors. It would need another $200 Mn to be able to run its operations properly. The immediate problem that the airline is facing today is that GMR, which operates the Hyderabad and Delhi airports, has put the airline on “cash and carry” in Hyderabad. That means the airline can operate only if it pays the money upfront. Other vendors/ suppliers have also placed the airline on “cash and carry” basis which has resulted in the recent cancellation of flights.

The board of the airline is considering a proposal to cut debt by more than half by selling property, converting loans from its parent company into equity, and changing the terms under which it leases aircraft. The airline promoted by Mallya's UB Group, which owns United Spirits, India's biggest liquor company. The UB Group will also convert $135 Mn of debt into equity as part of the plan to pare debt. The airline would also approach its existing bankers for additional working capital financing to meet immediate commitments towards salary payments and dues to AAI.

The Government must stay put on this issue as setting a precedent by helping in a bailout of one private airline would be dangerous for the future. As Mr. Rahul Bajaj, Chairman – Bajaj Auto, rightly said "If it's a free market economy, those who die must die."

The shoe-thrower's index

You gotta love The Economist and the charts and indexes it creates.

Here is another interactive one called The shoe-thrower's index with weightings that caused the Arab Spring. Play along. It's brilliant!

Gold ETF's - good time to exit

Gold touched a fresh high of $ 1,913 an ounce in Asian markets today thereby indicating an YTD return of a whopping 37%. Gold prices, exactly 20 years ago on this date, were quoting at around $ 354 an ounce. What a rally it has been for the yellow metal which has won the confidence of scores of investors. While new investors and speculators are still eyeing it to make a quick gain, conservative players have started raising an alarm.

The recent rally in Gold prices is mainly due to the US crisis (downgrade from AAA to AA+ and a slowing economy) and the Euro crisis (defaulting EU zone economies like Greece, Spain & Italy). which has left global stock markets tumbling (refer my previous post in this regard). These are the 2 main factors which diverted investor interest to Gold, which is considered to be relatively safer than the stock markets. But I feel investors need to be cautious at this stage. They should keep in mind that there is nothing like a risk-free market. Recall that Gold had crashed to about $260 an ounce after hitting a peak of $ 850 in 1980. I agree with William Bernstein of Efficient Frontier Advisors, USA that whenever an asset gets securitized, that tends to raise its price level in the short term and lower its expected returns in the long term. The influx of new investors, he explains, gives a quick boost to returns, but the sudden surge of popularity then raises prices so high that future gains are harder to sustain.

So how long will this rally continue? I think it’s a short term phenomenon which might last for another 6-8 months. Once the world markets stabilize and global economy revives, money should move out of Gold which would lead to a substantial drop in prices. As far as investment perspective is concerned, I sense a correction soon. For those who had bought ETF’s at far lower prices, this might be a good time to exit & book those gains. For those who are looking to enter, a bit of a wait is recommended.

Market Mayhem

While the world markets were just getting used to the on-going European Union crisis they now have to face a new battle. The recent historic downgrade of the US credit rating from AAA to AA+ by S&P has left the markets in doldrums. For some this comes as a surprise while for others this was pretty much expected. Take a load of this: the US gross debt has increased from 42% in 1980 to about 100% of GDP today; the fiscal deficit has increased from 3% in 1980 to about 11% today; the trade deficit has increased from about 1% in 1980 to about 4% today. For me, the downgrade is not a surprise. This was long overdue and was just being stalled for reasons that are more political than anything else.

The result of this downgrade has so far been catastrophic. The Economist reports that Asian markets dropped just over 2%. Markets in Spain and Italy fell over 2%, as well, while Britain's FTSE was off 3.4%, and Germany's DAX dropped 5%. In America, the Dow dropped 5.55%, and the S&P tumbled a stunning 6.66%. Brazil's exchange was down just over 8%.

A renewed credit crunch could be on our hands. A run on money market funds could begin. Investors who had put money after the 2008 collapse thinking that their money was now safe are being punished. If Fitch & Moody’s go ahead & downgrade US, the carnage would only grow. God bless America!

Damn you Bush

This chart sums it all. If it wasn't for the tax cuts and more importantly, the war spending in Iraq and Afghanistan during the Bush era, US would now be sitting pretty on the debt front.

Destination Radio

I just finished downloading Destination Radio, the newly launched radio app by Emirates Airlines and let me tell you how awesome it is. The app is free and available for the iPhone and iPod Touch and is aimed at those who want to explore the local flavor before traveling or simply want to discover new places.

The app streams live radio from local stations in 97 cities that Emirates flies to. The New York station, for example, is WCBS 101.1, while in Mumbai, one can tune into Radio City. There’s one station per city, and if the connection fails, you can listen to the default station, BBC World Service. The app works over wi-fi or a 3G connection and the streaming quality is extremely good. The app also allows Emirates’ passengers to check-in for a flight, manage their bookings and even track flight status. Brilliant!

The airline has announced that they would include new destinations as and when the airline expands in the future. Until then, keep discovering!

More austerity?

Interesting take there on the ongoing Euro Zone Crisis:

[Image courtesy: The Economist]

Gold's own country

As you read this, the final estimates of the recently found treasure at Trivandrum’s Sree Padmanabhaswamy temple are being worked out. Rough estimates put the value at about $22 Bn, making the temple perhaps India’s richest. Gold coins dating back to the era of the East India Company, sacks of diamonds and solid-gold idols are among the treasures that have been found in the sealed vaults of this 16th century temple located in the southern Indian state of Kerala.

The discovery has also revived questions about who should manage the wealth, much of which is believed to have been deposited at the temple by the royal family of the princely state of Travancore, which acceded to India when the country became independent in 1947. Some of the vaults under the temple have not been opened for nearly 150 years, temple officials have said. India’s Supreme Court will decide what happens to the treasure and the rest of the temple once it has established the total value of the holdings. The government of Kerala is of the opinion that the riches belong to the temple & must be retained there. The state will ensure its security, says the Chief Minister of Kerala.

Imagine what this treasure can do to the economy of the cash-strapped state which struggles to find funds for its infrastructure projects. A state which relies on remittances from non-resident Keralites across the world, primarily the Middle East, might boast of high literacy rates & dropping infant mortality rates. But when it comes to providing basic infrastructural needs or even creating new jobs, the government takes the back seat. Kerala’s public debt is around $15 Bn. If the treasures are deployed for economic & social benefits, it can possibly become one of the most attractive Indian states for investment. Foreign investors, who almost always shy away from pumping money into Kerala (due to obvious reasons), might just view the state with a whole new perspective.

Some might argue that if the temple’s money is utilized for economic & social benefits, so must the money from various churches, mosques and other such places of worship. I say pool them all together! But that’s easier said than done. A country which is highly sensitive when it comes to communal issues prefers to leave such kind of wealth untouched. And eventually the only people to benefit from the wealth are the members of the Trusts who run the show at the temples, churches and mosques.

The benefit of having all that gold worth billions of dollars is next to nothing if it’s put back in those treasure vaults of the temple. If nothing else, I say place it with the Reserve Bank of India (RBI) and sit back and watch the Rupee. :)

New age socializing

Hilarious take on social skills:

The case of rising gold prices

Gold prices have been on a roll over the past few years. A quick look at this page would tell you that had you invested in the precious metal 5 years back, it would've given you a return of about 160%.

Even after a steady rise, gold prices are likely to remain high and here are some of the reasons:

1. Central Banks, who have been net sellers for a very long period, turned net buyers in 2010. They bought nearly 76 tonnes of gold. This trend further accentuated in the first quarter of 2011, when Central Banks were net buyers of gold to the extent of 129 tonnes. Turns out, the rise in gold prices has caught the eye of various Central Banks who believe it is a welcome addition to their reserves given its status as 'store of wealth' even during the periods of crisis.

2. Analysis shows existing gold mines across the world are aging and output is falling. A study (titled 'In gold we trust') of 375 gold projects by Standard Chartered Research team suggests a very limited production growth profile for the next 5 years. A 10-year bull market in gold has done little to drive production. A lack of funding from equity markets and shortage of large gold mines makes it difficult for the industry to compensate for the depletion caused by aging mines and falling grades. As a result, there are very few large gold mines commencing operations in the next 5 years. Only 7 gold mines and one copper/gold mine are capable of adding a total of 500 koz gold production over 2011-15.

3. Standard Chartered's analysis of IRR (internal rate of return) for major gold projects under construction (for which the acquisition cost of gold reserves has already been spent) shows the gold price would need to be $1,400 /oz to generate a 20% IRR, usually the minimum return requirement. It's from this point of view that analysts have been saying gold will touch $2,000/oz, since new projects would need that price realization to produce an IRR of 20%. Till then, gold production will face delays.

4. The above study also shows that currently, 1.8% of China's forex reserves is in gold; if China were to bring this percentage in line with the global average of 11%, it would have to buy another 6,000 tonnes of gold, or more than two year's global mine production. Imagine what that would do to the price of gold. This is also true of other major holders of foreign exchange reserves like Japan as well as India. Japan's gold reserves stand at a minuscule 3.2% of its total foreign exchange reserves of $1.14 trillion. India's gold reserves at 8.2% are much closer to the world average of 11%.

5. The rise in the price of gold is also due to the rising per capita incomes in China and India. While Indians have been traditional gold buyers, the Chinese are getting there as well.

The gold run is here to stay. Perhaps it's time to consider those gold ETF's (exchange traded funds) which are fast catching on.

[With inputs from The Economic Times]

Indian equivalents

This is definitely one of the best interactive maps I've come across. Places Indian states at an interesting perspective. Clearly, Northeast needs to buck up!

Deal...no deal

So Europe's finance ministers have put off approval of the next installment of aid to Greece until July. They demand that the Greek Parliament first approve spending cuts and financial reforms that include a large-scale privatization program. This comes after some seven hours of talks in Luxembourg. Greece needs 12 bn euros from the 110 bn euros bail out package by mid-July to avoid default.

Will Greece ever come out of this mess or will it be left dangling in thin air by the IMF? It's a wait and watch situation.

[Image courtesy - http://news.xinhuanet.com]

Secular Art

Art should have no barriers. No religious barriers at least. But that’s not the case in India. Maqbool Fida Husain, India’s renowned painter, died last week while being in exile as a Qatari citizen. Husain had been the target of Hindu activists, especially Shiv Sena, for several years. They objected to his depiction of goddesses in the nude, claiming this was an insult to Hinduism. They threatened to rip his paintings apart, making it difficult to exhibit his paintings without fear of damage.

Husain was not the only one who was driven out of the country due to repression from communal activists. Salman Rushdie, who was born in Mumbai but lives in the UK, saw New Delhi ban his Satanic Verses for its perceived depiction of Prophet Muhammad. Author Taslima Nasrin, a Bangladeshi, was hounded out of her country because she graphically depicted the sufferings of Hindus in Bangladesh. But this did not ensure her a warm welcome in Kolkata. Her writings displayed sexual liberation which didn’t go well with the Muslim communalists and was eventually forced to leave Kolkata.

Trouble is art in India is still a victim of dirty politics. The government is more concerned about gaining popularity with the vote bank. Hindu activists have no problem with the erotic sculptures of Khajuraho but they have a problem when a muslim man depicts the same in the form of a painting. That's convenient! The Supreme Court may have acquitted Husain in majority of the cases filed against him. But did the government really protect him from the attacks and threats? The government talks about woman empowerment but did it take any form of legal action against the activists who assaulted Taslima in public or against the mullahs who issued a fatwa offering huge sums of money for her murder?

Turns out, a secular India is only secular as long as you are politically correct. Husain’s death should be an eye opener for the Indian government. India lost him not after his death but the day he left the country in 2006. RIP Husain.

Wines with IQ? Bleh!

Vinopic, a wine selling company in the UK, has developed a noble way of ranking wines. It recommends wines by way of their Intrinsic Quotient. The website says:

By focusing on key quality indicators in wine, it shows the skill of the winemaker, how well-made the wine is and the quality of grapes used for making the wine. The Intrinsic Quotient is the result of over a decade of groundbreaking research on wine.

Giving wines IQ scores is definitely an innovative way to market the product. It simplifies consumer choice especially benefiting rookie wine drinkers who would buy a bottle of wine that comes with any sort of recommendation. Wine connoisseurs would probably have a good laugh at the concept. Do we really need an IQ score to tell us which wine is healthier than the other? If I were looking for healthy drinking options I would just stick to orange juice. I wouldn’t buy a bottle of wine because it’s healthier for me.

We don’t need no IQ scores for our wines. After all, as William Shakespeare rightly said, “good wine needs no bush”.

Social Bubble

I have never been a fan of tech stocks. They are naturally bubble-prone. Unlike any other industry, say manufacturing or commodities or even finance, their prospects can never really be quantified. Another problem with the industry is the extra hype it tends to create which eventually cools off as and when investors realize the actual worth. Precisely the reason for the dotcom bubble of 2000 which saw the share prices of various tech firms plunge.

But investors haven’t learned from the mistakes of 2000. Another tech bubble is now inflating. The Initial Public Offerings (IPO) by internet or rather social-media companies has come back to life. The recent IPO of LinkedIn, whose share price more than doubled on the first day of trading (from an offer price of $ 45 to the closing price of $ 94) at the New York Stock Exchange (NYSE), places the Company’s valuation at $ 9 Bn. Yandex, Russia’s largest search engine, floated its shares on the NYSE which saw its price rising by 50% on the first day of trading. In December 2010, Youku – China's version of Youtube – went public, with a first day valuation of $ 4.4 Bn against 2010 revenues of $ 59 Mn. And more recently, in May 2011, RenRen – Chinas version of Facebook – had a first day valuation of $ 7.4 Bn against 2010 revenues of $ 77 Mn. Groupon, an online group buying website that offers discount coupons, has recently filed its IPO application and is likely to have a valuation of $ 15 Bn against 2010 revenues of $ 713Mn. And don’t even get me started on the mother of all the madness – Facebook – which is targeting an IPO in October 2011 valuing the Company at a whopping $ 70 Bn.

Dr. Jean-Paul Rodrigue at the Dept. of Global Studies & Geography, Hofstra University, presents the lifecycle of a tech stock in this graph. We have entered the ‘Mania phase’ where we are now witnessing an irrational demand for the tech stocks. What follows the mania phase is disaster.

Unlike software & hardware technology firms, the problem with the social-media companies is that their business model is yet to be fully tested. David Reibstein, Wharton marketing professor, raises few very valid concerns about Groupon's model. He points out that the Groupon business model works better during recession than it does during a vibrant economy. The reason some retailers might be willing to provide supply to Groupon is because they have excess inventory. As the economy picks up and there is less excess inventory, the availability of supply will go down. The willingness of the merchant to offer deep discounts will go down. The business proposition to the customer will be less attractive if [the item or service being offered] doesn't have the same deep discount. Although Groupon may boast of a subscriber base of 83Mn+, the snag is that the Company is still in the red. It lost $390 Mn in 2010 and $103 Mn in the first quarter of this year. A statement by Groupon's chief in its IPO prospectus is laughable:

“The path to success will have twists and turns, moments of brilliance and other moments of sheer stupidity. Knowing that this will at times be a bumpy ride, we thank you for considering joining us”.

How very assuring!

Yes it is true that social networks and mobile applications are reinventing the way businesses function. But irrational exuberance has returned to the internet world & investors should beware. Take a break and rethink those valuations. Are they really justified? Or else what’s next? Soon you will find yourself putting your money in companies like Zynga, creator of the online game Farmville, in which players grow vegetables and breed pigs. That’s beyond disaster!

[With inputs from The Economist & knowledge @ Wharton]

Let the moolah flow

The numbers look disturbing. According to Reserve Bank of India (RBI) data, Foreign Direct Investment (FDI) fell more than 25% in the fiscal 2010-2011 to $ 19.43 Bn compared to previous year. What’s even more disturbing is that India is the lone South East Asian country to witness a decline in FDI inflows. In sharp contrast, FDI in China has soared in recent years. Institutions like the World Bank have credited FDI as a key driver of China’s macroeconomic boom.

The FDI debate has been on for a while now mainly attracting attention in the retail sector. India permits 100% FDI in cash & carry and wholesale trading (which is business-to-business) and 51% in single-brand stores (such as Gucci or Apple). On the other hand, FDI in retail trading is permitted in Brazil, Argentina, Singapore, Indonesia, China and Thailand without limits on equity participation. India was expected to join this long list of countries. But the wait continues. So what stops India from joining the list? The reasons are more political in nature than economical. Reports say India has around 12 million kirana [mom-and-pop] stores who are slated to lose their livelihood altogether if 100% FDI in retail is allowed. And that my friend, is a large vote bank. Not to mention the middlemen and traders who are essential elements to the kirana stores losing their livelihood as well.

The above reasoning is plain rubbish. The kiranas would only integrate with modern retail. One has to keep in mind that about 75% of India’s population still earns less than $2 a day. So unlike in more advanced economies with high per capita income, kirana stores will continue to be a part of the Indian market given the shopping styles of consumers. The culture of shoppers to shop daily coupled with lack of storage space make the kiranastore an integral part of the Indian middle class.

India needs good FDI inflows especially in the retail sector. Besides just the money coming in, FDI would also bring with it advanced technology [supply-chain and logistics], skill enhancement, new employment and more importantly, it would make the retail sector a lot more organized than it currently is. The retail industry in India estimated at $ 400 Bn and organized retail forms a meager 5% of it.

2011 has been a rocking year for Indian politics. With scam after scam hitting the government and the nation demanding strong anti-graft laws [read my previous post], it is highly unlikely that the government would disturb the vote-bank any further. But it’s high time the government took the FDI debate more seriously and come out with attractive policies. India should take care not to lose its share of the pie.

[With inputs from knowledge @ Wharton]

Oh the Graft!

As you read this, a revolution of sorts is underway in the largest democracy in the world. Yoga Guru Swami Ramdev and ‘Gandhian’ social acitivist Anna Hazare have held the Indian government at ransom over the past one week. They demand a corrupt-free nation and a law in place to clean up the mess that has only grown dirtier with every passing day. Though India is one of the largest democracies in the world, with all the trappings of a well-defined structure— parties, assemblies, elections, free press etc—it still appears to be mere gimmickry, with rampant corruption almost everywhere.

Anger over corruption has spiraled as the UPA government lurches from scandal to scandal. The 2G spectrum scam which is estimated to have cost the exchequer up to $ 39 Bn; the Common Wealth Games scam which saw Mr. Suresh Kalmadi, head of the Organizing Committee, awarding illegal Games contracts to a Swiss firm causing a loss of about $ 21M to the exchequer; the Adarsh Housing scam; the fiasco over appointment of Chief Vigilance Commissioner P.J. Thomas; several corporate scams like the infamous ‘Satyam’ case and various money laundering cases like the stashing away of about $ 8 Bn in swiss bank accounts by stud farm owner Hasan Ali Khan. The list goes on and on.

Ramdev and Hazare’s fast-unto-death approach has turned into a full blown media circus. Hazare has given the government a deadline of 15th August to pass an anti-corruption bill. But will that be enough? I believe the problem is far bigger than just having a law in place. The biggest challenge is implementing the law itself. The Economist is right on saying ‘Regulations are not, by and large, deterrents to corruption, but a source of it’. And this is only obvious in a country like India because it is getting richer fast, and the faster its economy grows, the more chances arise for mind-boggling theft.

This new age democracy needs a leviathan revolution to eliminate corruption. The UPA government has several challenges to tackle besides the anti-graft agitations heating up the nation; like rising food inflation, petrol prices and a dancing Sushma Swaraj to name a few.

A piece of Greece? No thanks

About 2 years ago, while my wife & I were lazying on one of the pristine beaches in Mykonos, Greece, it may have occurred to us how cool it would be if we could actually own the beach or a part of it. On reading this article, the thought may seem like a possibility in the near future. Debt-strapped Greece is not only depending on the much awaited EU bail out package but also taking some measures of its own.

The Hellenic Public Real Estate Corp., the government body that manages public property, has a list of about 75,000 individual government-owned properties. The corporation has appointed National Bank of Greece SA to lead a consortium of advisers who are now preparing to sell an initial portfolio of 20 to 30 properties, the first of which could be put on the market in the next few months, according to Aristotelis Karytinos, general manager of the real-estate division at National Bank of Greece.

Noble idea, romantic even, but will this proposition fly with foreign investors? How is owning the land any safer than owning the debt? My guess is Greece would offer long-term leases (99 years or something like that) while retaining the ownership of land. So imagine, your landlord would in fact be the Greek Government! Lovely. And not to mention the poor administrative & taxation systems combined with a sorry state of political affairs which has left the economy dangling.

Property might come cheap in Greece, but should you invest? My advice is rather stay put.

Making up for lost time

So India has finally gotten around to strengthen its trade relations with Africa. A pledge of $5Bn over the next 3 years in development support is a good start but not anywhere close to what China has to offer. A quick look at this article tells us how China is way ahead in their trade relations with Africa.

But India has its own strengths when compared to China. First and according to me the strongest is the relatively large number of the Indian Diaspora in Africa. Second, with a stronger and well established private sector, India can give stiff competition to the state-owned companies in China.

India may have been a little late in taking this step, but it's a start. The success would lie on India's pace with catching up on lost time & keeping up with it.

Spring season

The thing with being an ardent follower of The Economist is that it increases your faith in it with every passing day. Take for example this article which was published almost 2 years ago talking about the Arab Spring:

A quiet revolution has begun in the Arab world; it will be complete only when the last failed dictatorship is voted out.

Much to the magazine's prediction, the Arab Spring has spread across the MENA region. Many lives have been lost in the revolution that has been rather intense in Egypt, Libya & Syria. It's time these dictators stepped down and gave democracy a chance. But then again, is democracy the only solution?