SONY >>>>>CAN SONY BE COOL AGAIN ?

 Cut throat competition in the electronics business coupled with "APPLE" domination and a strong Japanese Yen has reduced SONY's market capitalisation to a shadow of it's former self.

The thing is - Can SONY be cool again?
Does it turn to mobile handsets and hardware or does it focus on the entertainment space (music, video and motion pictures)?
It's way behind Samsung in the mobile phone market and faces cut throat competition in the LCD market although it's "BRAVIA" brand has excellent brand recall in this commoditized business.

Kazuo Hirai (new CEO since April 2012) clearly has a lot to do, as he works to engineer a turnaround at SONY!

Kazuo Hirai on Where He's Taking Sony - Businessweek

$16,000,000,000,000 !!!!

Well depending on where you read it, US Debt has now already crossed / is about to cross the $16 trillion mark!
(Yes, that's a large number of ZEROS!)

What is worrying is the rate at which it has risen this past year and the prudent market watcher can only worry about the cost of servicing this massive debt in the future once interest rates rise!!

Meanwhile, markets were trending upwards ahead of  the Federal Reserve's annual  symposium at Jackson Hole. However, it now appears that we may not hear anything new and markets are heading into the annual meet in a rather lacklustre manner.
So no QE3 for now I guess??

$16,OOO,OOO,OOO,OOOBAMA! | ZeroHedge

"""""November 16, 2011 was a historic date: that's when the US officially surpassed $15 trillion in debt for the first time since World War 2. We celebrated it by cheering $15,OOO,OOO,OOO,OOOBAMA. Today, August 28, 2012, is when we can unofficially celebrate again, because 286 days after the last major milestone was surpassed with disturbing ease, total US debt following today's $35 billion auction of 2 Year bonds is, well, in a word: $16,OOO,OOO,OOO,OOOBAMA! 
The result: $16.05 trillion, which is what the debt to the penny will officially show next week.

          ..................................................
          ....................

Of course this will be the total following the balance of this week's auctions. In the meantime, the US is now officially between that ceiling and a $16 trillion floor.
But wait. You aint's seen nothing yet. At this rate of growth, total US debt will surpass:

• $17 trillion on June 10, 2013;

• $18 trillion on March 23, 2014;

• $19 trillion on January 3, 2015; and

• $20 trillion on October 16, 2015

And on, and on, and on..."""""

MORE LINKS :

Some clear thinking on the debt

""""August 29, 2012Rome, Italy
If you haven’t heard yet, the United States of America just hit $16 trillion in debt yesterday. On a gross, nominal basis, this makes the US, by far, the greatest debtor in the history of the world. 
It took the United States government over 200 years to accumulate its first trillion dollars of debt. It took only 286 days to accumulate the most recent trillion dollars of debt. 200 years vs. 286 days.

This portends two key points: 

1. Anyone who thinks that inflation doesn’t exist is a complete idiot; 2. To say that the trend is unsustainable is a massive understatement.    """""""

US IOU — $16 Trillion

Rodney Davis: US needs debt repayment plan

US debt to pass $16 trillion - NYPOST.com

US Debt Officially Passes $16 TRILLION | SilverDoctors.com

INDIA'S NET FINANCIAL SAVINGS RATE CONTINUES TO TREND DOWNWARDS

As the Indian consumer consumption boom continues, a combination of moderating growth rates, high inflation and low real rates on investments is taking a toll on India's Net Financial Savings rate. 

""According to preliminary estimates released by the Reserve Bank of India (RBI), net financial savings moderated to 7.8% of GDP in F2012 from 9.3% of GDP in F2011 and 12.2% of GDP in F2010.

Net Financial savings comprises cash investments, deposits with banks and non bank companies, investments in shares, debentures, mutual funds, small savings and also life insurance, provident and pension fund

RBI attributed the decline in net financial savings to persistently high inflation, leading to low real rates on bank deposits and small savings funds, coupled with uncertain global environment adversely impacting equity market returns, leading households to favour investments in valuables such as gold. In addition to these factors, we believe slower urban job creation and income growth would also have affected the rate of household savings."""

LINKS:

Savings in financial assets dip: RBI

India not saving enough, says RBI

Household savings lowest in 22 years 

Chart of the Day: Chinese stocks in steep downtrend & CBOE VIX AT NEW LOWS

As stock markets around the world continue to edge upwards, the Chinese Equity Markets and the CBOE VIX have both been trending downwards.

Chart of the Day - Chinese stocks in steep downtrend

Equity valuations continue to be driven by hopes of QE3 and Bailouts/handouts by Central Bankers rather than fundamentals, which at this stage are still looking rather weak.

As the VIX trends to new lows, it's important to take profits in stock portfolios and rebalance them towards more stable large cap companies that preferably have less leverage than their mid-cap counterparts.

INDIA: OIL MARKETING COMPANIES IN DIRE STRAITS

A weak Indian Rupee, unyielding Crude Oil prices and an unsustainable petroleum subsidy policy by the Indian Government have resulted in Indian Oil Corporation ( IOC) reporting a massive loss of Rs. 22,451 crore for the quarter ended 30th June 2012.


India will have to urgently address its petroleum subsidy policy. The Oil Marketing Companies (HPCL, BPCL, IOCL), Upstream Oil Companies (ONGC, GAIL) and the Indian Government cannot continue to subsidise petroleum products consumed by the Indian public at this rate.

Despite the Oil Sector being a major source of revenue for the government via numerous duties levied at the state and central govenment level; massive subsidies have resulted in heavy borrowings for Oil marketing companies.

The article below highlights the ongoing crisis in the case of IOC, that has now pushed up its debt levels to almost Rs.90,000 Crores as of June 2012, and is incurring interest costs as it awaits reimbursement by the Government.

LINK:
IOC: Marred by uncertainties

INDEPENDENCE DAY -15.08.2012 - INDIA @65

Well, after a year of policy inaction, high inflation, and slowing growth; it's now 65 years since Indian Independence.

Below are links to a couple of articles that are well worth a read.
Ruchir Sharma and Swami Aiyar have an interesting take on Indian Independence and the Outlook for India's economic growth rate amidst a slowing and deleveraging global economy

RUCHIR SHARMA :
India's breakout path: It needs to break global growth script, not slavishly follow it

SWAMINATHAN AIYAR:
Independence Day: Why Partition was a good thing for India

CRUDE OIL OVERVIEW -BUSINESS LINE NEWSPAPER - July 1, 2012

The Sunday Business Line Newspaper from ''THE HINDU'', on July 1, 2012 discusses the average price of an Indian Basket of Crude Oil and compares $/barrel and INR/barrel prices.

Crude Oil imports account for just over a third of  India's imports; and thus high Crude Oil prices coupled with a weak INR have resulted in persistent inflation despite high interest rates set by the RBI.

Also, this situation has resulted in rising government Petroleum (Oil sector) subsidies as the Indian Government continues to heavily subsidize retail fuels like Diesel, Cooking Gas and Kerosene.

If the price of Crude Oil refuses to correct despite a slowing world economy, and if the Indian Rupee fails to regain lost ground vs the USD; the Indian Government will have to rethink its policy of "unsustainable" Petroleum sector subsidies and instead plan for a gradual move to market driven - prices for fuel sold by the Oil Marketing companies.

EURO ZONE DEBT CRISIS -ANY SOLUTION YET?

I guess not!

Here's an excellent cartoon by "KAL :  THE ECONOMIST : LONDON ENGLAND"

It came out around the time of the Wimbledon Tennis Tournament
It is titled....."DEUCE | Meanwhile, in the Euro Zone"

SOURCE:
https://www.nytsyn.com/cartoons/cartoons?start_date=1901-01-01&search_id=74680&page=2#783810

http://www.kaltoons.com/
Kevin Kallaugher (KAL) is the editorial cartoonist for The Economist magazine of London.
For all those who may not have heard of him, he is the artist behind the famous BUY SELL Cartoon 
http://www.kaltoons.com/wordpress/portfolio/?album=1&gallery=6

Along with INGRAM PINN of the FT, he is one of the legends of the world of Financial and Political Cartoons.

EUROPEAN YOUTH UNEMPLOYMENT - A REAL CRISIS.

A really worrying issue that has only started to feature in business news recently, is youth unemployment.

Below is a chart of European youth unemployment by Adam English at Inside Investing Daily.

Another Link, this time from the Telegraph:

Youth unemployment passes 50pc in Spain and Greece - Telegraph

Y.V. REDDY - ON REGULATION, BANKING AND REFORMS

Below is a link to an article from today's Economic Times.

Y.V.Reddy was the steady hand at the head of India's Central Bank ( The R.B.I) that guided the Indian Banking system through the crises of 2008-2009.

Interview with Y.V.REDDY (Former Governor, Reserve bank of India)17 Jul, 2012,
Shaji Vikaraman & Gayatri NayakShaji Vikaraman & Gayatri Nayak,ET Bureau

Link: http://economictimes.indiatimes.com/opinion/interviews/banks-have-to-be-board-driven-government-should-not-dictate-their-operations-yv-reddy-former-rbi-governor/articleshow/15011122.cms?curpg=2

"Banks have to be board-driven, government should not dictate their operations: YV Reddy, Former RBI governor"

Some edited excerpts:

There is growing criticism, both internally and overseas, about policy inertia and inept economic management by the government. What is your assessment and what, in your view, should the government do to swiftly address some of the issues on the economic front?

I cannot comment off the cuff. But I will draw back and say what IG Patel's perception of reform is. One major point he made was about the distinction between macroeconomic management and micro-sectional reforms. Macroeconomic management has, by and large, been good in India. Yet some reforms are needed. His emphasis was on sectional reforms and efficiency of the reforms.

The broader aspect is that three areas were not sufficiently addressed. One is the issue of corruption, second is confidence of civil society, and third is higher education. So, in a way, we should not think that if you keep deregulating, it is reforms.
Then there are issues in the global economy. Does that mean we should not move forward? I don't think reforms as contemplated before the crisis should be blindly carried forward. In considering reforms, efficiency should be a criterion. Macroeconomic balance is important. Macroeconomic imbalances create instability. We require growth impulse and it depends on savings and investments and productivity.

Recently, Dr Rangarajan said that even without changing the banking regulation laws, the RBI could consider issuing bank licences. Do you agree?

No, I don't agree. Purely from the global crisis situation, all over the world, they are very strict from the regulatory perspective. Even before they experienced the crisis, the Reserve Bank had requested some regulatory framework for regulating the banks, that is absolute necessary minimum.

So if the government is not able to give minimum power to the regulator, it is inappropriate to give any more licences till the law is changed and the regulator has enough regulatory (jurisdiction/freedom), more so because the type of entities that are likely to get the banking licences.

You already have Indian corporates in the mutual fund industry, they have got interconnected insurance companies, they have interconnected NBFCs, and then if you add banks, then it going to be extremely difficult for a regulator. The whole conglomerate structure - it is not only going to be a financial conglomerate, but an industrial-cum-financial-cum-banking conglomerate - becomes too big to regulate.