Moneylife Events
Moneylife Foundation at Management School
Management students learn how to manage their money and invest smartly
 
Moneylife Foundation held yet another seminar on safe and smart investing, this time for finance students of Guru Nanak Institute of Management Studies at Matunga, Mumbai. While most of the attendees, who are students of business administration and finance, would be expected to have a good grounding in matters of finance from a theoretical perspective, there is little in management education syllabus that prepares them for the intricacies and the realities of managing their own money. Moneylife Foundation’s seminar on being “Safe and Smart with Your Money” prepares them for just that. 
 
The first session was conducted by Sucheta Dalal, managing editor of Moneylife and founder-trustee of Moneylife Foundation. She pointed out to the students how they can avoid financial mistakes so they do not lose money. The second session was addressed by Debashis Basu, editor of Moneylife and founder-trustee of Moneylife Foundation. He articulated the simple steps for investing smartly. 
 
Mr Basu explained how to keep the task of managing one’s savings and investments simple, while understanding returns after tax and post-inflation. As college students have time on their side, he advised them to invest in equity mutual fund schemes and stocks with an investment horizon of 15 years or more and asked them to stay away from gold, real estate and insurance products.

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Pulse Beat

Salt May Not Be an Enemy

Anew study showed that patients who are salt restricted with heart failure did not do as well as those who took normal amount of salt. The study showed significantly less deaths in the group that ate normal salt even in the presence of heart failure. 
 
This is the danger of believing in reductionist studies that form the basis of our modern Western medicine. In practice, I see a significantly increased number of elderly patients getting admitted to intensive care units with low salt syndrome and coma, at times. This was almost unknown during my younger days. Now, we are using more potent diuretics and are also restricting salt in hypertensives and in heart failure. I must hasten to add that there are a few salt-sensitive individuals who might do well with less salt but they are few and far between.

 

HPV Vaccine Founder Says It Is No Good!

The founder of the HPV (human pappilomavirus) vaccine, Diane Harper of University of Louisville, feels that the currently used HPV vaccines are not safe and effective. Even if the HPV vaccine does prevent cervical cancer, and not just HPV infection—an outcome that has never been proven—it is unlikely to have much effect on cancer rates.
 
The other problem is that we do not know how long the antibody levels last after vaccination. If young girls are vaccinated, as is being done in third world countries, thanks to the high-profile claptrap, the vaccine effect might wear off before the girl becomes sexually active. In 98 of the 100 patients having sexual activity, HPV is killed by vaginal secretions. It benefits only the 2% that we are talking about, to vaccinate 100%! Well, even that would be sensible, if the vaccine is absolutely safe. According to the United States CDC (Centers for Disease Control and Prevention) 0.034% of the girls vaccinated would die! The independent researchers put this death figure at five times that number.
 
These vaccines did not have any human studies before they were administered to poor Adivasi girls in India aged nine years and above and should have certainly been classified as an experimental study, to test the safety of the vaccine. It is no surprise that those experiments did show the death of some girls. The vaccine looks as dangerous as the cancer it is supposed to prevent. In the reductionist paradigm of Western medicine, predicting the future of patients is a common pastime. But it has no scientific validity in the real world, as no human disease can be predicted for the dynamic human system that does not follow the linear laws.

 

Seasonal Variation in Depression

We used to think that depression presents severe symptoms in some seasons, especially in winter. A new large cohort study of depressives has confirmed that there seems to be seasonal variation in the severity of depression. 

 

Side-Effects of Chickenpox, Shingles Vaccines

Recent studies have indicated that the chickenpox and shingles vaccine might have unacceptable side-effects and they might not be as effective as claimed.Vaccines seem to be a very good business and the whole world becomes the customer for vaccines. However, it does not look good, as the basic foundation of artificial vaccine protection does not seem to be a very good idea, to begin with.

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RBI keeps repo, CRR, and other key rates unchanged
While keeping key rates unchanged, the RBI said expectations of a normal monsoon after two consecutive years of rainfall deficiency, the large positive terms of trade gain, improving real incomes of households and lower input costs of firms should contribute to strengthening the growth momentum in FY2016-17
 
The Reserve Bank of India (RBI), in its last bi-monthly credit policy review on Tuesday for FY2015-16 has kept repo, reverse repo, cash reserve ratio (CRR) and bank rate unchanged. With repo rate remaining at 6.75%, the reverse repo rate under the liquidity adjustment facility (LAF) will remain unchanged at 5.75%, and the marginal standing facility (MSF) rate and the bank rate at 7.75%.
 
In a statement, RBI Governor Dr Raghuram Rajan said, "The Reserve Bank continues to be accommodative even as it leaves the policy rate unchanged in this review, while awaiting further data on the development of inflation. Structural reforms in the forthcoming Union Budget that boost growth while controlling spending will create more space for monetary policy to support growth, while also ensuring that inflation remains on the projected path of 5 per cent by the end of 2016-17."
 
"The current momentum of growth is reasonable, though below what should be expected over the medium term. Underlying growth drivers need to be rekindled to place the economy durably on a higher growth trajectory. The revival of private investment, in particular, has a crucial role, especially as the climate for business improves and fiscal policy continues to consolidate. The Indian economy is currently being viewed as a beacon of stability because of the steady disinflation, a modest current account deficit and commitment to fiscal rectitude. This needs to be maintained so that the foundations of stable and sustainable growth are strengthened," he added.
 
According to RBI, inflation has evolved closely along the trajectory set by the monetary policy stance. It said, "With unfavourable base effects on the ebb and benign prices of fruits and vegetables and crude oil, the January 2016 target of 6% should be met. Going forward, under the assumption of a normal monsoon and the current level of international crude oil prices and exchange rates, inflation is expected to be inertial and be around 5% by the end of fiscal 2016-17." 
 
"However, the implementation of the Seventh Central Pay Commission award, which has not been factored into these projections, will impart upward momentum to this trajectory for a period of one to two years. The Reserve Bank will adjust the forecast path as and when more clarity emerges on the timing of implementation. Vagaries in the spatial and temporal distribution of the monsoon and the impact of adverse geo-political events on commodity prices and financial markets add additional uncertainty to the baseline," the central bank added.
 
Arundhati Bhattacharya, chairman of State Bank of India (SBI) said, “With the RBI clearly mentioning that inflation trajectory is evolving as per apex bank expectations there are reasons to believe that RBI will continue in an accommodative mode.  However, on liquidity front, there remains a concern with systemic liquidity deficit well in excess of the prescribed 1% NDTL currently. With revised Liquidity Coverage Ratio kicking in and deposit growth lagging, RBI may have to be proactive in managing the liquidity deficit through tools available at its disposal.”
 
According to Nomura, the RBI's policy stance remains accommodative. "Even though the RBI did not cut rates today, it remains data-dependent with the upcoming budget (quantity and quality of fiscal consolidation) and the inflation trajectory to play a pivotal role. In our base case, we expect the RBI to deliver a 25bp rate cut after the budget is released at its scheduled April policy meeting, although we do not rule out an earlier inter-meeting cut after the budget is released but before the April policy meeting. Beyond this, we expect the RBI to stay on hold, as we do not expect CPI inflation to undershoot the RBI's 5% target on a sustained basis, due to the ongoing growth recovery and still-high inflation expectations," it added.
 
Radhika Rao, India Economist, DBS Bank, said, "The policymakers interpreted on-going liquidity squeeze as temporary or seasonal rather than structural, which saw policymakers leave the reserve ratios intact. In the post-policy comments, RBI Governor Rajan highlighted that the firm 10-year yields were not only a reflection of inflation concerns domestically but also elevated yields amongst the emerging market peers in light of external volatility".
 
RBI said, prospects for the rabi harvest are improving slowly. The near-term outlook for industrial activity may be constrained by adverse base effects in fourth quarter and still weak exports, although the pick-up in corporate profitability on the back of declining input costs may provide an offset. Some categories of services are likely to gain momentum on expectations of higher activity in coming months, though the aggregate state of activity remains muted. On balance, therefore, GVA growth for 2015-16 is kept unchanged at 7.4% with a downside bias. 
 
For 2016-17, RBI sees the growth to strengthen gradually, notwithstanding significant headwinds. "Expectations of a normal monsoon after two consecutive years of rainfall deficiency, the large positive terms of trade gain, improving real incomes of households and lower input costs of firms should contribute to strengthening the growth momentum. Yet, still weak domestic private investment demand in a phase of balance sheet adjustments, re-emergence of concerns relating to stalled projects, excess capacity in industry, sluggish external demand conditions dampening export growth could act as headwinds. Based on an assessment of the balance of risks, GVA growth for 2016-17 is projected at 7.6%," it said. 
 
Umesh Revankar, MD, Shriram Transport Finance Company Ltd, said, "While we understand that the RBI is perhaps holding up for the front loading cuts to get transmitted in the system, more such cuts are still needed from the RBI. As this should trigger the banking system to start responding or else in this tug of war we could continue to see a status quo on the economy and the future growth prospects of India Inc. Our sense says 25 - 50 bps rate cut over the next six months should provide some respite to retail borrowers, besides corporate India on the cost of funds and it may trigger them to start investments."
 
Talking about the government's Start-up India initiative, RBI said it will take steps to ease doing business and contribute to an ecosystem that is conducive for growth of start-ups and issuing a detailed statement separately. "These measures will create an enabling framework for receiving foreign venture capital, differing contractual structures embedded in investment instruments, deferring receipt of considerations for transfer of ownership, facilities for escrow arrangements and simplification of documentation and reporting procedures," it added.
 
Here are the latest policy rates following RBI review…
 
Repo Rate.......................6.75%
Reverse Repo Rate..........5.75%
CRR.................................4%
Bank Rate.......................7.75%
 
The first bi-monthly monetary policy statement for FY2016-17 will be announced on 5 April 2016.

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