Nobody will knock on your door and let you know that liquidity is about to diminish!

It is important to consider that markets are frequently – but not always – a discounting mechanism. Asset markets could discount some tighter monetary conditions significantly ahead of time. And by declining, they could actually exacerbate the speed at which liquidity contracts – as was the case in May/June of last year, and especially for the Middle Eastern stock markets, which peaked out in late 2005 or early 2006 and correctly dropped by more than 50% in anticipation of less favorable liquidity conditions in the region

So, if I am right in forecasting tighter liquidity conditions, I suppose that the asset markets and economic sectors which benefited the most from expanding liquidity will be the ones that suffer the most once liquidity expands at a lower rate or even if it contracts.


For Complete IIPM Article, Click on IIPM Article

Source : IIPM Editorial, 2006

An IIPM and Management Guru Prof. Arindam Chaudhuri's Initiative


For Complete IIPM Article, Click on IIPM Article

Source : IIPM Editorial, 2006

An IIPM and Management Guru Prof. Arindam Chaudhuri's Initiative

When markets reverse, liquidity dries up rapidly.

Once again, I should like to emphasize that international liquidity does not need to shrink in order for asset markets to undergo sharp corrections: A slow down in the rate of growth is sufficient to reverse the advance in prices – particularly when asset markets are over-extended. The last point I should like to make about the widely used buzzword “excess liquidity”. Did anyone hear about “excess liquidity” at the markets’ lows in October 2002, and last June after just a modest correction? But I have heard the words of “there is just too much money around”, “the market will never decline because foreigners will continue to buy”, “should the market decline the government will support it”, “plenty of liquidity will drive prices higher” in Japan in the late 1980s, in the Asian emerging markets just ahead of the crisis in 1997, & in the midst of the NASDAQ bubble.



For Complete IIPM Article, Click on IIPM Article

Source : IIPM Editorial, 2006

An IIPM and Management Guru Prof. Arindam Chaudhuri's Initiative

The ‘elusive’ peace... or simply a lack of logic?

Afghanistan’s future hangs in the balance as its weak national government struggles to maintain support and legitimacy in the face of a widening insurgency, warlords, the heroin trade, and a disappointed populace. Across an arc extending from Afghanistan to East Africa, violence now also surges in Iraq, Lebanon, Somalia, and beyond, to Sudan’s Darfur region.

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Source : IIPM Editorial, 2006

An IIPM and Management Guru Professor Arindam Chaudhuri's Initiative

The Un‘healthy’ planners

The sole superpower of the world falls fl at on its face when it comes to providing basic health amenities to its citizens. It has been contended that although the general healthcare costs in US have climbed to the pinnacle, the insurance cover given to its citizens have declined at an alarming pace. Th e US Census Bureau in 2006 revealed that of the 300 million Americans, no medical insurance cover existed for almost 47 million of them. This number marks an increase by almost 1.3 million over the previous year’s estimates.

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Source : IIPM Editorial, 2006

An IIPM and Management Guru Professor Arindam Chaudhuri's Initiative

Sarin’s got a new pet, er... Hutch

Vodafone, Europe’s biggest mobile-phone group, has won the battle for a controlling stake in Hutchison Essar with a bid that values India’s fourth-biggest mobile firm at about $19 billion, including debt. It maybe recalled that the Essar Group, which owns 33% of Hutch Essar has also been bidding for the 67% being sold by Hutchison Telecommunications International.

Finally, it was Vodafone which has won the bid battle for the 67% stake, defeating India’s Reliance Communications and Hinduja group, as well as Essar Group.

For Complete IIPM Article, Click on IIPM Article

Source : IIPM Editorial, 2006

An IIPM and Management Guru Professor Arindam Chaudhuri's Initiative