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India's fiscal response to Covid19

Duvvuri Subbarao, former RBI governor, makes the hawkish case on fiscal expenditure in the FT. Rich countries can throw kitchen sink because they issue debt in currencies others crave Loss of revenue will take India's central plus state fiscal deficit to 10%+ (vs 6.5% budgeted) Cautions against the view that markets may not punish India as "rules of the game" are likely to change given the situation everywhere. Note record portfolio outflows and Indonesia downgrade. Also cautions against debt monetization by RBI ("will dent RBI credibility" and reinforce the case for rating downgrade) Suggests explicitly "affirmed fiscal restraint post crisis", which makes sense I have a huge respect for Dr Subbarao. But it is hard to agree with an overly cautious stance. If this is once in a century event, we must borrow from future and risk rating downgrade (and try to win it back later). We also control our own destiny with fiat INR and surely this is...
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Non linear complex systems

One of the topics of great concerns is unintended and typically second or third order consequences of Covid19 lockdowns. There is also non-linearity which was famously captured by @SuperMugatu Serious Take: Base case for anyone doing any actual channel checks here should be 2 quarters of severe supply chain disruption. Media and Sell Side dripping out reality on lag because they have to maintain access. Autos, Semis, Travel annual numbers are absurd. — Dan McMurtrie (@SuperMugatu) February 20, 2020 I will list, on an ongoing basis, a few big ones I am seeing. Obviously, this does not fully capture the extent to which system will adapt and humans will fight back. Food. Farmers destroy food and milk as US restaurants close . They are unable to reroute quickly to grocery stores. Many meat (pork) processing plants have closed due to worker infection, leading to price surge, and which may lead to culling of animals, although with a small slack as cattle can be put out to past...
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History in the Oil Markets

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Oil futures plunged into negative territory. This is dramatic. From FT comments: "It’s a future trade that went negative because the deadline for the contract was close to expiring and nobody wants to take delivery of oil they can’t store." Vix promptly obliged by going up 10%. The recent rally in S&P remains a very hated rally.
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About this blog

21.4.2020 What is this Blog about? And why do it? This is a bit of a journal about the world - especially my world - in the times of Covid-19. This is a huge moment in history - maybe once in a lifetime. It seems worthwhile to journal in the middle of it. I intend to Capture zeitgeist   Do some clear thinking (hopefully) Do some good research and pattern matching Capture some thoughts and feelings The idea is to make it a good journal to keep coming back to during the Pandemic as well as after the Pandemic. My words are likely to revolve around the disease #Covid19 itself, about #India, #Singapore and the #world, and about #investing. Ground rules (for myself) Write frequently (its history being made afterall!) Write precisely (e.g., Oil and Oil futures are different. Covid19 and Sars-CoV-2 are different) Write simply and concisely (that's just good practice). But time is precious so do not bother editing too much. Leave that for essays and publications. Al...
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