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A FICTION: NOT FAR AWAY FROM RECENT FUTURE REALITY

A FICTION: NOT FAR AWAY FROM RECENT FUTURE REALITY

In late evening, when I had just pressed the shut down button of my workstation, a colleague of mine entered the office chamber (Officially allotted to me to work).Hello, was the first word uttered out by her and before I could ask the purpose, she herself expressed that she planned to have my company while walking back to home, at least the part of distance that was common to we both. I welcomed the idea and also thanked her for the same. Thus the journey homewards started. While on walk the momentary silence was done away by my colleague, when she requested the permission to ask question that was coming to her mind. I agreed to help her to the limited capacity of mine.Image- Bricks of Gold

 Probably it was the prices of yellow metal that were troubling her and my colleague wanted to know, where the prices are expected to move in future and why. This I am inferring from the talks that continued.

She started the conversation by posing her curiosity as ahead: “Where do you see the price of gold going in the days to come?”

Since, at that moment, I was not exactly focusing on ‘investment advisory’, so I responded by saying that “on a broad level, the price are supposed to continue their northward journey.”

It seems that my response confused her a bit, as she soon came up with another question that “what I mean, when I say a broad level.”

I got the point and then explained to her that “the prices of any commodity do not move in a straight line. When I say on a broad level, it means that the prices will keep moving northwards, but in between they may drop as well, but they will pick up again, and thus will continue to scale up.”

It seems, that she was not ready to buy anything that I said, therefore, she questioned that what lay behind my confidence, which she visualized while I was answering her first curiosity.

Suddenly I realized that majority of investors; rarely scan the external and vital economic variables that are often of political nature. This made me aware that now I need to go bit detailed and also in a manner that she could easily comprehend.

“Well, I was just reading through some material and I realized that there is another solid reason for gold prices to go up,” I told her.

“Is it something other than all the money printing that is happening and is likely to happen in the days to come, all around the world?” she asked.

“Yes”, I answered.

“So what is this new reason?” she was now more curious.Image - Gold with a Medival Painiting in Background

Now I started by posing a question as ahead “Ever heard of Hugo Chavez?” Pat came the reply, “nope” with a supplementary question that now who’s he?

He is the President of Venezuela, a country in South America.”                                

Probably she got a bit more confused and said that she knew that, but expressed her surprise on the issue that what “Venezuela” has got to do with the price of gold.

This made me aware that now my job was to explain history, international polity, and international trade, cost of transaction and accounting to her, and all this in very limited time of few minutes. I knew that I may be bombarded with whorls of questions.

 I started with letting her know that Venezuela has the 15th largest gold reserves in the world amounting to 401.1 tonnes. A lot of this gold is lying abroad in bImage - Golden Fairyanks in New York, London and Zurich.

“But why will a country keep its gold overseas?” she interrupted.

 I started to introduce her with history. I said that “a part of the reason comes from history. Till August 15, 1971, the world was on a gold standard. Paper currencies were ultimately convertible into gold. This meant that countries had to settle their deficits in gold.” I followed this by giving an instance from international trade. I asked her to assume that England and Germany are exporting and importing goods from each other. At the end if France exports more to England than England to France, there is a deficit.” This means that England had to pay France. This payment was to be made in gold. A look at her face made me feel that she has now started picking up what I was attempting to explain. I carried on by adding that “now this meant that gold had to be physically moved from England to France, which of course was a pain. Movement meant cost of insurance as well as security.”

Image - Gold being Transported via Air

She was prompt in asking that “what was the way out?”

 I added for these reasons “a lot of this gold is simply stored overseas at the Federal Reserve Bank of New York (a part of the Federal Reserve of the United States, the Central Bank of the US).”

“How do you think this is going to help?”

It’s simple; I added and just narrated what Peter Bernstein writes in his book “The Power of Gold”. For example, if England lost gold to France, a guard at the Federal Reserve had merely to bring a dolly to England’s closet, trundle the gold to the French closet, and note the change in the bookkeeping records.’

She got the point, and allowed my request to take her back to Hugo Chavez.

The deliberations continued further, certainly with some statistical inferences. Estimates suggest that nearly 211 tonnes of the 400-odd tonnes of gold that Venezuela has are with banks abroad. Chavez has asked this gold to repatriated back to Venezuela.”Image - Hugo Chavez Nationalises the Gold Mines

Now this brings a twist in the story, and the discussion to follow will also attempt to answer possible reason for Hugo Chavez’s such an act.

 “Chavez has had an anti-US stance for years and may feel that because of that Venezuela runs the risk of its gold being seized.”

“Gold Seized? Why would such happen and does the possibility of such an act exist?” was the latest in series of questions.

“It sure is. I explained the same by making her aware of the ongoing Libyan foreign exchange reserves crisis, which happens to be an outcome of its foreign reserves being seized by allied nations with declaration of war earlier this year.”

 “But what has all this got to do with the price of gold? To me it’s as simple as me wanting to have gold in my own locker rather than the bank locker.”

I agreed to her statement, while continuing to explain by adding that all is not that straightforward as concluded by her, though to some extent she was correct. The straight forward part of transaction would be limited to 99 tonnes of total 211 tonnes lying abroad, as this 99 tonnes are deposited with the Bank of England in London. Repatriating that back to Venezuela would be a straightforward process.”

Image - Gold Jewellary at Display

 Now comes the not so straight forward part, which happens to be of the tune of 112 tonnes of the gold and same is lying abroad with what are known as bullion banks. J P Morgan is one of them. Estimates suggest that Venezuelan gold worth $807 million (or around 450,000 ounces of gold) is lying with it.”

 She was instant, and argued that this should also be as straight forward as it is in the case of Bank of England, London, while simultaneously her facial expressions conveyed me that she wanted to know, if I dare to differ from her opinion. Certainly, I had to differ, and added that things are not always as simple as they seem to be. The statistics again came handy in quoting that “estimates suggest that the total amount of physical gold with J P Morgan currently stands at around 338,303 ounces (1 troy ounce equals 31.1 grams).”

Now, it seemed that she was out of reasons, as she expressed her ignorance about having to come across any news in media regarding, such a huge bank robbery in which approximately 1,11,697 ounce or 3473.8 kilo grams worth gold was looted.  I had to instantly chip in by saying that, this is not a case of bank lifting, but a way of functioning of financial system in general and banking sector in particular. Let me add an example to illustrate it? I sought her permission. The phenomenon goes as explained ahead [the attempt was to explain the process by making it as easy as possible, so that even a novice can understand].Image - Gold of Merchants in Various Weights put at London Central Bank

“Central banks around the world had a huge amount of gold lying in their vaults, not earning any return. The end of 2007 witnessed the stock of gold with central banks around the world rising to 32,000 tonnes of gold.”

 I requested her to be more attentive to whatever I was going to add now. Out of the 32,000 tonnes gold held, the Central Bank lent approximately 14,000 tonnes to Bullion Banks like J P Morgan. James Turk and John Rubino in their coauthored book The Collapse of the Dollar, have argued that “lending, for instance, involves the central bank transferring gold to a major private bank, known as bullion bank, which pays the central bank a small-but-positive interest rate, then sells the gold in the open market.”

In this manner “central banks convert the gold into cash and then deploy this cash, somewhere to earn some positive rate of return. This based on a very fundamental assumption that idle assets provide no return, and there is fair possibility that such assets may ultimately add up some cost to the holder.” These costs may range from cost of storage to cost of security. As per meaning conveyed by the operative word “lending”, since the gold has been lent, therefore, the central banks have all the rights to, and can demand it back, whenever they want.

She chipped in by adding that probably “this is what Venezuela is doing right now”; and thus conveyed me a feeling that she was sincerely following the every single word uttered by me. 

 I nodded in agreement and continued further by adding that, since, the bullion banks have promised to return the borrowed gold to the central banks so they will have to return the same. In prevailing situations these bullion banks are not having the volume of gold that was lent to them by Central Bank. In financial and monetary world, this position is conveyed by the term ‘short’, and this means that these bullion banks are ‘short’ gold.

Now comes a significant turn in events, that may work as catalyst to force the prices of gold to break the roof. As the situation deliberated above suggests that, in case, sometime in future, these bullion banks are asked to deposit the volume of  gold lent to them by central bank, they will be left with no choice and would be obligated to buy gold in order to repay the central banks’.”

“So, as I can get, it goes like, that in such a scenario the bullion banks like J P Morgan will now have to buy back gold from the market in order to repay the Venezuelan government, given the situation that Venezuela has around 450,000 ounces of gold deposited with J P Morgan, whereas J P Morgan at present has only 338,303 ounces of gold in its accounts/ record books,” she added.

Exactly, I said in agreement, and carried the deliberations forward by adding, that this buying will lead to the price of gold rising further. I knew that now she has got answer to her question, but then too, I continued it by saying that this is only one part of the story.

Much like a child, who is curious to know about everything, she was now eager to learn that what the remaining part of story was now. She requested me to unfold the other part of the story.

I continued by giving her a reference of a report titled “Thing That Make You Go Hmmm” , and told that this report points out, ‘Chavez’s move could set in motion a chain of events whereby Central banks who store the bulk of their gold overseas in ‘safe’ locations scramble to repossess their country’s true ‘wealth’. If that happens, the most high-stakes game of musical chairs the world has ever seen will have begun’,” I said.

“This sounds very scary”, she added.

Image - Gold derails the US $ and US Economy“Yes, you are very much correct while mentioning that the report further states that ‘any delay in repatriating Venezuela’s gold could potentially start a frantic scramble by central banks to claim their physical. God save the scenario, but if it actually happens, rest assured that gold price will be on fire. A scenario will take place, which has neither been seen in past, nor even imagined.

It will give birth to an economic tsunami of magnitude, which will turn the great economic recession witnessed by world or even the jasmine revolution and contribution of social media to same to seem dwarf.

Don’t be surprised if I that there is enough in media to believe U S Govt. Manufactured Fake Gold

Perhaps, there are only few who can imagine the magnitude of risk, specifically if they are not linked to foreign trade. Let me illustrate it. It’s one thing to counterfeit a twenty or hundred dollar bill. The amount of financial damage is usually limited to a specific region and only affects dozens of people and thousands of dollars. Secret Service agents quickly notify the banks on how to recognize these phony bills and retail outlets usually have procedures in place (such as special pens to test the paper) to stop their proliferation.

Image - U S Government Manufactured Fake Gold

This is the most sacred of all commodities because it is thought to be the most trusted reliable and valuable means of saving wealth.

A recent discovery — in October of 2009 — has been suppressed by the main stream media but has been circulating among the “big money” brokers and financial kingpins and is just now being revealed to the public. It involves the gold in Fort Knox — the US Treasury gold — that is the equity of our national wealth. In short, millions (with an “m”) of gold bars are fake!.Who did this? None, but the United States Government, as claimed by Chinese Authorities.

Background
In October of 2009 the Chinese received a shipment of gold bars. Gold is regularly exchanges between countries to pay debts and to settle the so-called balance of trade. Most gold is exchanged and stored in vaults under the supervision of a special organization based in London, the London Bullion Market Association (or LBMA). When the shipment was received, the Chinese government asked that special tests be performed to guarantee the purity and weight of the gold bars. In this test, four small holed are drilled into the gold bars and the metal is then analyzed.

Officials were shocked to learn that the bars were fake. They contained cores of tungsten with only a outer coating of real gold. What’s more, these gold bars, containing serial numbers for tracking, originated in the US and had been stored in Fort Knox for years. There were reportedly between, 5600 to 5700 bars, weighing 400 oz. each, in the shipment!

At first many gold experts assumed the fake gold originated in China, the world’s best knock-off producers. The Chinese were quick to investigate and issued a statement that implicated the US in the scheme.

 

What the Chinese Uncovered

Roughly 15 years ago — during the Clinton Administration [think Robert Rubin, Sir Alan Greenspan and Lawrence Summers] — between 1.3 and 1.5 million 400 oz tungsten blanks were allegedly manufactured by a very high-end, sophisticated refiner in the USA [more than 16 Thousand metric tonnes]. Subsequently, 640,000 of these tungsten blanks received their gold plating and WERE shipped to Ft. Knox and remain there to this day.

According to the Chinese investigation, the balance of this 1.3 million to 1.5 million 400 oz tungsten cache was also gold plated and then allegedly “sold” into the international market. Apparently, the global market is literally “stuffed full of 400 oz salted bars”. Perhaps, its worth is as much as, 600-billion U S dollars.

Always Yours — As Usual — Saurabh Singh

 RELATED LINKS FOR READERS WHO WANT TO GO IN MORE DETAILS TO BEFORE COMMENTING ON STORY
  1. http://etfdailynews.com/2011/08/17/venezuelan-president-hugo-chavez-sends-precious-metal-etfs-a-wakeup-call-gld-iau-slv-gdx-agq/
  2. http://philosophers-stone.co.uk/wordpress/2011/08/hugo-chavez-gold-runs-bank-runs-and-bank-holidays/
  3. http://profit.ndtv.com/news/show/chavez-officially-nationalizes-venezuela-s-gold-industry-174207
  4. http://notime4bull.com/aggregator/sources/13
  5. http://mikepiro.com/blog/as-chavez-pulls-venezuelas-gold-from-jp-morgan-is-the-great-scramble-for-physical-starting/
  6. http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/traders-brace-for-venezuela-gold-transfer/article2134031/print/
  7. http://www.bighaber.com/haber/chavez-to-nationalize-venezuelan-gold-industry-1072000.html
  8. http://www.advisorperspectives.com/commentaries/global_082611.php
  9. http://americasfinancialmeltdown.blogspot.com/2010/11/below-is-antiwar_4391.html
  10. http://mikepiro.com/blog/ron-paul-audit-federal-reserve-gold-stores/
  11. http://www.freedomsphoenix.com/News/061976-2009-11-26-us-govt-manufactured-fake-gold.htm
  12. http://www.the-boondocks.org/forum/index.php?t=msg&&goto=157202#msg_157202s

Wish HC gave him chance to present case: GBUAT V-C… [Every Body Has Right to be Heard]

Wish HC gave him chance to present case: GBUAT V-C… [Every Body Has Right to be Heard]

The Vice Chancellor of the GB Pant University of Agriculture and Technology (GBUAT), Pantnagar, Dr BS Bisht, in his reaction to the high court’s direction to register a case against him and his predecessor and some other senior officials of the university in a case of financial irregularities, has said that he has great respect for the judiciary and the court at least should have given him a chance to present his case also.

‘I have great respect for the court. But it did not give us any chance. Had the court given us an opportunity, we could have also been able to present our case,” the VC maintained, while talking to The Pioneer.

“I would like to state that since the same case had been dismissed by the district court some time back, so my request was had the court given us a chance, I myself or any other concerned officials could have appeared before it with all the facts and necessary documentary materials so that we could also have put our side before the court,” he said.

“The fact is that why should anyone indulge in such activities that may cause any kind of loss to the Government exchequer. So I am deeply hurt at this juncture,” Bisht further said. When asked what could be the next course of action of the university in this connection, the VC maintained: “I have not so far received the original copy of the case. So only after going through the original copy of court’s direction, we would decide.”

It is worth mentioning that Uttarakhand High Court in its judgment on a case of alleged financial irregularities filed by a person of Pantnagar against the GBPUAT has directed to file a case against Bisht, his predecessor, present finance controller and his processor and contractors.

In the complaint, it had been alleged that all the above mentioned officials in connivance with some private recruitment firms that used to supply labourers to the university caused a huge loss to the Government exchequer.

The complainant also alleged that a complaint was earlier also lodged at the local police station, but no action was taken. He also alleged that contractual labour system was introduced only to make quick bucks.

Always Yours — As Usual — Saurabh Singh

 

Source: Retrieved from http://www.dailypioneer.com/330044/Wish-HC-gave-him-chance-to-present-case-GBUAT-V-C.html on April 08, 2011

New World Order Imminent!- Anyone For A Game Of Ping Pong?

This vedio has been uploaded for my learned audiences, fans, students and scholars and rest others, who wish to understand issue of New World Order. I would top up the same by a commentry on Asian Environment Soon. Hope you find some value in it.Always Your—– As Usual — Saurabh Singh

Vodpod videos no longer available.

 

Relationship Marketing in Retailing

Only Business and No Administration

Only Business and No Administration will never create a Synergy Termed Business Administration. Business Administration is not alone Commerce; rather to be exact, it is art and science of governance applied to Business Entity.Illustration could be given as in Case of Nations, they do transact a number of Business and Commerce Related Activities, but what is being done is act called Governance and Administration. Popularly Termed as Public Administration.

Vodpod videos no longer available.

 

Tribute to Late Coimbatore Krishnarao Prahalad

THOUGHTS AND PHILOSOPHIES ARE BLESSED WITH AN ATTRIBUTE TERMED IMMORTALITY & THIS IS HOW THEY DIFFER FROM INDIVIDUALS, INSTITUTIONS, SOCIETY, AND NATIONS

C. K. Prahalad was one of nine children born into a Madhva brahmin family in 1941. His father was a well-known Sanskrit scholar and judge in Chennai. At 19, he joined Union Carbide after obtaining a degree in Physics from Loyola College, Chennai. Prahalad called his Union Carbide experience a major inflection point in his life.

Prahalad is the author of a number of well known works in corporate strategy including ‘The Core Competence of the Corporation’ (Harvard Business Review, May-June, 1990). He has also authored several international bestsellers, including ‘Competing for the Future’ (with Gary Hamel), 1994, ‘The Future of Competition’, (with Venkat Ramaswamy), 2004 and ‘The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits’, Wharton School Publishing, 2004. This last book transformed the Indian-born Prahalad from bestselling academic to global opinion former. His new book with co-author M. S. Krishnan is called The New Age of Innovation. His ideas are tackle the big issues of our times and make a difference.

He was co-founder of Praja Inc (“Praja” from a Sanskrit word “Praja” which means “citizen” or “common people”). He later became its chief executive officer.

The goals of the company ranged from allowing common people to access information without restriction (this theme is related to the “bottom of pyramid” or BOP philosophy), to providing a test bed for various management ideas. The company eventually laid off one third of its workforce and was sold to leading business integration and process management software company, TIBCO. He was also on the board of TiE, The Indus Entrepreneurs. At Harvard Business School, Prahalad wrote a doctoral thesis on multinational management in just two and a half years, graduating with a D.B.A. degree in 1975.

It was just a few weeks earlier, when I and some of my friends from different time zone had appointments with each other to deliberate and have a real learning of happenings in respective economy, markets and societies we were physically present. As per IST it was around 12:00 mid-night.

This serves two purposes, i.e., a small interaction for learning and updating on developments taking place in each other’s personal fronts and not professional. Something, probably an individual of present time may call wastage of time as it never provides RoI (as per them) or does not result in rupee, paisa, taka, dollar, franc, euro, pound or any currency for that matter.

Somehow during interactions the deliberations took a turn towards emerging countries and the type and size of markets they happen to be, and we somehow shifted to the concept of ‘BOTTOM OF PYRAMID’, which happened to be a concept developed by a thinker, who could be easily located as strategic advisor to people at TOP OF PYRAMID.

It was not easy for me to believe, when after a couple of days, i.e., on Friday (April 16, 2010), I learned that a great administrative thinker and philosopher lost his battle of life to his Lung Disease in California, USA, just at age of 68. I agreed to his philosophy or not is not a thing to be discussed at this moment.

What mattered to me was the way he viewed the things, events and future when seeing it with business goggles on.

I always appreciated him for his courage; which  I term as “Affording Luxury and Adventure to think, without any fear of having to pay any price for it, and also without any fear of society and rational individuals.”

I always found myself to be much behind to him when it came to fearlessness of society and its norms, his courage to say what he felt as needed, the style of thinking that, which I call as “Latro – Analytical thought process”,   and his uncanny knack of looking deep in embryo of time, which people have permanently christened ‘future’; till it’s not born.

I was a fan of him due to reasons of sharing a common beliefs, that what I in my terms call as “India is tomorrow of everyone’s today”. The late CKP used to call it as “Laboratory of Innovations”.

The void that has been created, due to him quitting the job, I doubt can be filled by cost or sacrifice. CKP was the first person, who made world believe in the innovativeness of Indian Companies, and future dominance of the same in global commerce too.

I will just say that I would always be missing this Administrative thinker, philosopher and visionary who envisioned India @75 and emphasized on it during his talks.


Always Yours  —-  As usual —  Saurabh Singh

War amongst two Organs of same Body: Did Somebody Say Cannibalization: Is it Suicidal?

Market regulator SEBI has barred 14 private life insurance companies from selling unit-linked insurance plans without its approval, giving a fresh twist to the turf war between SEBI and insurance watchdog IRDA.

“We expect some companies to move the court” said the CEO of a life company. “It is unfortunate that this dispute has been allowed to reach this stage. It is time for the finance ministry to intervene” he added.

In an order signed by Prashant Sharn, wholetime director, SEBI, said, “I hereby direct the entities mentioned in this order not to issue any offer document, advertisement, brochure soliciting money from investors or raise money from investors by way of new and/or additional subscription for any product (including ULIPSs) having an investment component in the nature of mutual funds, till they obtain the requisite certificate of registration from SEBI.”

The 14 companies mentioned in this order include Aegon Religare, Aviva, Bajaj Allianz Life Insurance, Bharti AXA, Birla Sun Life, HDFC Standard Life, ICICI Prudential, ING Vyasa Life, Kotak Mahindra Old Mutual Life, Max New York Life, Metlife India, Reliance Life, SBI Life, TATA AIG Life.

A few months back, SEBI had questioned individual life companies why they were selling investment products without its approval. Companies had responded individually that insurance laws permit them to offer an investment component within a life insurance policy. They also said that they were regulated by SEBI who had cleared all these products. The life companies were supported by the market regulator, who reiterated the stand taken by life companies.

In its final order SEBI said, “I find that the entities by their own admission have stated that there are two components of ULIPSs – an insurance component where the risk on the life insurance portion vests with the insurer and the investment component where the risk lies with the investor. This establishes conclusively that ULIPSs are a combination product and the investment component need to be registered with and regulated by SEBI”

SEBI’s order has implications not only for the life insurance companies but also for their promoters who have sunk in over Rs 26,000 crore in the form paid up capital. According to analyst reports, a significant portion of the value of various companies including, ICICI Bank, Aditya Birla Nuvo, SBI Life and Bajaj Fin serve. Most of the business written by these companies is through ULIPSs. If these companies are barred from selling ULIPSs, their valuations are likely to be hit.

Atul Surana , Certified Financial Planner and MD of Catalyst Financial Planning, says, “Anybody will understand one clear partial stand of SEBI which has not included LIC’s name in the list of life insurance companies selling ULIPSs. Secondly, this sounds much like a war between IRDA and SEBI who are bent on proving their authorities. These two regulators could have sorted out the issue on regulatory process first and then issued the order!”

So far as the order’s negative implications are concerned, experts say that while they broadly agree with the concerns of the regulator, it is also important to look at some possible negative implications of this move.

For instance, this process of another regulatory approval might take away the sheen from these products. Insurance companies may not be inclined.  The Securities and Exchange Board of India’s latest order on ULIPSs is expected to have far-reaching implications for the concerned life insurance companies as well as investors. SEBI has issued a directive to all private life insurance companies not to issue any offer document or advertisement soliciting money from investors for a ULIPS or any product having an investment part in the nature of mutual funds, till they approve of the same.

This directive is the latest in a series of initiatives taken by the market regulator to put an end to all unfair market practices and make the process of investments simple, fair and cost efficient for an investor. While the immediate fallout will be negative for all the 14 private life insurance companies as ULIPSs form a major part of the new business written by these companies in the recent past, yet some financial experts feel that this is a welcome step as it puts an end to the unfair practice of pushing life insurance policies as investment products to gullible investors.

“In the current market practice investors end up paying very high charges for the investment part of these policies and are usually not aware of the expenses they are paying. This is because unlike a normal share or mutual fund investment there are usually a myriad of charges in a ULIPS product hidden behind numerous provisions and clauses which are sometimes not easy to comprehend even by insurance professionals,” says Ashish Kapur, CEO, Invest Shoppe India Ltd, adding, “hence common investors have very little chance of ever getting an accurate picture of the costs they are incurring on these insurance and investment combination products.”

Still all is not well with the SEBI order as it is believed to have some partiality besides having some negative implications to offer these products if the regulations are very tough and costly to comply with.

FRIENDLY FIRE: EXPECTED NUMBER OF CASUALTIES

SEBI’s order asking 14 insurance companies to stop selling unit-linked insurance plans has turned into full-fledged regulatory battle with the Insurance Regulatory and Development Authority issuing its own order directing the 14 companies to continue selling ULIPSs.

“After due consultation with the members of the consultative committee all the 14 insurance companies which are mentioned in the order of SEBI are directed to note that notwithstanding the said order of the SEBI, they shall continue to carry out insurance business as usual including offering, marketing and servicing ULIPSs in accordance with the Insurance Act 1938” IRDA said in a late evening order on Saturday signed by chairman J Harinarayan.

In the order IRDA observed that SEBI’s order would upset financial stability, jeorpardise policy holders interest and was prejudicial to the interest of insurers. The 14 companies mentioned in this order include; Aegon Religare, Aviva, Bajaj Allianz Life Insurance, Bharti AXA, Birla Sun Life, HDFC Standard Life, ICICI Prudential, ING Vyasa Life, Kotak Mahindra Old Mutual Life, Max New York Life, Metlife India, Reliance Life, SBI Life, TATA AIG Life.

“The IRDA Act `99 is specifically enacted to provide for an authority to protect the interests of holders of insurance policies, to regulate, promote and ensure the orderly growth of the insurance industry” IRDA said. The insurance industry was greatly relieved by IRDA’s order. “It is now between the regulators who have to settle this among themselves” said a senior industry official.

SEBI’s order has more far reaching implications than a press release or a circular. Since the order has been issued under Section 34(i) (a) and (b) of the insurance Act. IRDA has said that in the year `08-09 ULIPS policies involving a total premium of Rs 90,645 cr were in force. In fiscal `09-10 upto February 16.7 lakh policies have been sold with a premium of Rs 44,611crores. “It is also observed that the 14 insurance companies have an equity capital of Rs 16,281cr as on March 2009” IRDA said.

The insurance regulator said that observance of SEBI’s order would cause the stoppage of all renewals of insurance policies already invested by the insuring public may result in forced premature surrender of insurance policies causing substantial loss to the policyholders and to the insurers. “The effective stoppage of the sale of the products would cause a complete drying up of revenue flows to the insurance companies which could disrupt the payment of benefits on maturity, on death and on other admissible claims, putting the policyholder and the general public to irreparable financial loss. The financial position of the insurers will be seriously jeopardized thus destabilizing the market and upsetting financial stability” IRDA said.

IRDA IS FIRST TO BLOW CONCH – DIN’T YOU HEAR THE WAR CRY

SEBI’s order asking 14 insurance companies to stop selling unit-linked insurance plans has turned into full-fledged regulatory battle with the Insurance Regulatory and Development Authority issuing its own order directing the 14 companies to continue selling ULIPSs.

“After due consultation with the members of the consultative committee all the 14 insurance companies which are mentioned in the order of SEBI are directed to note that notwithstanding the said order of the SEBI, they shall continue to carry out insurance business as usual including offering, marketing and servicing ULIPSs in accordance with the Insurance Act 1938” IRDA said in a late evening order on Saturday signed by chairman J Harinarayan.

In the order IRDA observed that SEBI’s order would upset financial stability, jeorpardise policy holders interest and was prejudicial to the interest of insurers. The 14 companies mentioned in this order include; Aegon Religare, Aviva, Bajaj Allianz Life Insurance, Bharti AXA, Birla Sun Life, HDFC Standard Life, ICICI Prudential, ING Vyasa Life, Kotak Mahindra Old Mutual Life, Max New York Life, Metlife India, Reliance Life, SBI Life, TATA AIG Life.


“The IRDA Act `99 is specifically enacted to provide for an authority to protect the interests of holders of insurance policies, to regulate, promote and ensure the orderly growth of the insurance industry” IRDA said. The insurance industry was greatly relieved by IRDA’s order. “It is now between the regulators who have to settle this among themselves” said a senior industry official.

SEBI’s order has more far reaching implications than a press release or a circular. Since the order has been issued under Section 34(i) (a) and (b) of the insurance Act. IRDA has said that in the year `08-09 ULIPS policies involving a total premium of Rs 90,645 cr were in force. In fiscal `09-10 up to February 16.7 lakh policies have been sold with a premium of Rs 44,611crores. “It is also observed that the 14 insurance companies have an equity capital of Rs 16,281cr as on March 2009” IRDA said.

The insurance regulator said that observance of SEBI’s order would cause the stoppage of all renewals of insurance policies already invested by the insuring public may result in forced premature surrender of insurance policies causing substantial loss to the policyholders and to the insurers. “The effective stoppage of the sale of the products would cause a complete drying up of revenue flows to the insurance companies which could disrupt the payment of benefits on maturity, on death and on other admissible claims, putting the policyholder and the general public to irreparable financial loss. The financial position of the insurers will be seriously jeopardized thus destabilizing the market and upsetting financial stability” IRDA said.

POLICE DECIDES TO TURN SPECTOR

The finance ministry today kept a safe distance from the ongoing row between market regulator SEBI and insurance watchdog IRDA over ULIPs, saying the two regulators have to resolve the issue.

“It’s a matter between regulators; so they have to decide,” finance secretary Ashok Chawla told when sought his comments on yesterday’s SEBI decision to ban 14 life insurers from raising any more money from the unit-linked insurance plans (ULIPs) in which a portion of the premium amount is invested in stock markets, a move opposed by the insurance regulator.

The SEBI decision was taken after the market regulator had sent notices to these companies asking them as to explain why they did not take its permission to launch these schemes.

Insurance regulator IRDA is understood to have stated in its reply that regulation of ULIPs by IRDA is well-laid down and that it does not agree with SEBI contention that insurers need a certificate of registration from the market regulator for dealing in ULIPs.

The issue was also taken up at the meeting of the inter-regulatory body, the High Level Coordination Committee (HLCC). It was decided at the meeting that the two regulators should settle the issue between themselves.

Chawla said the SEBI and IRDA have not so far been able to come to any resolution. “So, SEBI has taken a legal process. He was going to be silent spectator to see the fire power of both Regulators.

 

Always Yours   — As Usual — Saurabh Singh, India

[Thanks are expressed for too many peple]

President Obama Slipped But not Much

President Obama’s ratings on foreign policy have slipped, but not as much as in other areas

Foreign and Military Policy

Leery from the start about President Barack Obama’s military and foreign-policy experience, Americans still retain some of that skepticism about their president as the nation’s commander in chief one year into his term.

Yet after a year of bruising economic problems and domestic-policy debates, foreign policy actually has emerged as an area of comparative strength for Mr. Obama. By a 50%-to-37% margin, those surveyed in the new Wall Street Journal/NBC News poll give him a positive rating for his handling of foreign policy, higher than his overall job rating and his rating for handling the economy.

Moreover, the 13-point positive differential between the share who approve and the share who disapprove of his handling of foreign policy is the most positive reading in his job appraisal. By contrast, he enjoys just a five-point positive differential on his overall job approval and a six-point negative gap between approval and disapproval on his handling of the economy.

Safety a Priority

Perhaps because of the attempted Christmas Day bombing of an American airliner, national security is climbing Americans’ priority list. In the new survey, national security and terrorism jumped to second on the list of voters’ concerns, with 17% citing that area as a top priority for the government, behind only job creation and economic growth. In the summer, only 11% called national security a top priority, behind job creation, the deficit and government spending and health care.

Some 56% now say they are either very or fairly worried that the U.S. will experience another major terrorist attack, up from 42% in October.

Views of Mr. Obama’s handling of terrorism are split down the middle, with 45% approving of his handling, essentially even with the 44% who disapprove.

In addition to new terror scares, Mr. Obama’s first year in office has seen the drawdown of U.S. forces from Iraq and the commitment of tens of thousands of troops to Afghanistan, both issues central to candidate Obama’s foreign-policy promises. Mr. Obama also won the Nobel Peace Prize and engaged in international travel designed explicitly to raise the nation’s popularity in the world.

White House senior adviser David Axelrod divided Mr. Obama’s first-year mission into three parts: stabilizing the economy; securing the president’s domestic priorities, which he believes will strengthen the nation’s economic future; and restoring U.S. standing in the world, along with international cooperation on issues from terrorism to Afghanistan.

Of those three, the foreign-policy component has been arguably the most successful, Mr. Alexrod maintained.

“It’s been a very productive year in terms of foreign policy,” Mr. Axelrod said in an interview.

Sharp Divisions

Still, in one critical area of foreign policy—as commander in chief of the armed forces—Americans rate the young president lower than they rate him as a person and an overall leader.

As Mr. Obama campaigned for president, he struggled to portray himself as the leader of the military. Running against a Vietnam war hero, Sen. John McCain, candidate Obama convinced only a third of Americans that he would be a good commander in chief in June 2008.

That figure soared amid the optimism that greeted his inauguration, when 55% said he would be a good or very good commander in chief.

After a year in the White House, Mr. Obama readings have dipped somewhat. Now, 49% give him a good rating as the commander in chief—compared with 72% who felt positively about the First Family, 64% who felt good about the president as a person and 54% who felt positively about Mr. Obama as a leader.

Gender, racial and ethnic backgrounds shaped opinions sharply. Only 42% of men felt positively about Mr. Obama as commander in chief, 38% of whites and 39% of those from small-town or rural areas. In contrast, 86% of African-Americans and 59% of Hispanics gave him positive mark

Following As A New Tool is Merging Contacts with Following

Enables Users to Follow Other Users and Their Work

To enable users to be in contacts with other users, and to follow their work. People didn’t always understand the difference between contacts and following. The difference was that contacts was a two-way relationship, so both parties had to confirm the connection. Following is a one-way relationship: you can follow someone’s work without them having to approve that. The idea behind having two connections was that ‘contacts’ were for people you know, whereas ‘following’ is for people whom you don’t know, but whose work you are interested to follow.

Users found it confusing to have these two kinds of connection. They often weren’t sure what the difference was between contacts and following, and even if they were, they weren’t always sure whether they wanted to be contacts with someone, or to follow them, so the experience wasn’t ideal. We decided to to merge ‘contacts’ into ‘following’, so now all connections between users on Academia.edu are ‘following’ ones. Existing contact connections have been converted into following connections, where both users are following each other.

The social networking sites is to help you find people in your research area, profession or any other area of interest, and keep in touch with them via the News Feed. Hopefully this change makes the sites easier to use, and makes it easier for you to keep up with people in your research area.

—–Always Yours as Usual—-Saurabh

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