The Ibs Times 33 Edition

THE IBS TIMES Issue— 33

22nd October 2008 [Wednesday]

GLOBAL ECONOMIC CRISIS

Captain M S Dhoni is congratulated by chairman of selectors K Srikkanth after the Indians routed the Aussies by a record 320 runs in the second Test at Mohali on Tuesday

INDEX (Just Click to go directly)

Global Economic Crisis

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Knowledge Desk 3 Brain Teaser

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Bulls Eye View 5 Jargonomics 7 Market Watch

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Personality - 8 Paul Krugman 1 2 3 4 5 6 7 8

US economy likely to limp into next year Beaten down by housing, credit and financial crises, the bruised US economy is likely to drag into next year, leaving more people out of work and more businesses wary of making big investments. Federal Reserve Chairman Ben Bernanke, scheduled to appear before the House Budget Committee, is likely to once again put the country on notice that there won't be a quick fix. Even if the turmoil gripping Wall Street was to let up and badly shaken confidence in the banking system fully restored, a "broader economic recovery is not expected to happen right away," Bernanke warned last week. "Economic activity will fall short of potential for a time," he said. The Fed chieLf has left the door open for further interest rate reductions to provide some relief. So far, though, a string of drastic actions by the Federal Reserve and the Bush administration has yet to turn around a bunker mentality. Banks fear lending money to each other and to their customers. Businesses are reluctant to hire and boost capital investments. Consumers have hunkered down. All the economy's problems are feeding off each other, creating a vicious cycle that Washington policymakers are finding difficult to break. One-third of Americans are worried about losing their jobs, half fret they will be unable to keep up with mortgage and credit card payments, and seven in 10 are anxious that their stocks and retirement investments are losing value, according to an Associated Press-Yahoo News poll of likely voters. President Bush has repeatedly asked Americans to be patient and give the government's relief efforts time to work. Democrats on Capitol Hill, however, insist another round of economic stimulus is needed. Unemployment could hit 7.5 per cent or higher by next year. Many analysts predict the economy will shrink later this year and early next year, meeting the classic definition of a recession. Some believe the economy already jolted into reverse during the July-to-September quarter. One of the president's chief economic advisers has commented that parts of the country probably already are experiencing a recession, and it could take a few months before the clogged credit system starts working again. Americans are feeling strained as their paychecks shrink and their savings shrivel. That's causing consumers to cut back, one of the reasons the economy is losing traction. Economic slowdowns overseas, meanwhile, are expected to crimp demand for U.S. exports, which had buoyed up the economy. Last week, the Treasury Department announced it would inject up to $250 billion in U.S. banks in return for partial ownership, something that hasn't been done since the Great Depression. The government hopes banks will use the capital infusions to rebuild their reserves and bolster lending to customers. "We took this measure as a last resort," Bush said last week. "Had the government not acted, the hole in our financial system would have grown larger," he warned. So far this year, 15 banks have failed, compared with three last year. And Wall Street's five biggest investment firms were swallowed by other companies, filed bankruptcy or converted themselves into commercial banks to weather the financial storm. In other efforts to stem the crisis, the Federal Deposit Insurance Corp. is temporarily guaranteeing new issues of bank debt — fully protecting the money even if the institution fails. The FDIC also said it would provide unlimited deposit insurance for non-interest bearing accounts, which small businesses often use to cover payrolls and other expenses. Frequently, these accounts exceed the current $250,000 insurance limit, so the expanded insurance should discourage nervous companies from pulling their money out. The Fed and the world's other major central banks recently joined forces to slice interest rates, the first coordinated action of that kind in the Fed's history. The United States and other top economic powers also have adopted a five-point action

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Global Economic Crisis (contd..) plan and pledge to do all they can to provide relief. Bush plans to host an international summit to discuss ways to fix the world financial system but warned on Saturday against changes that threaten capitalism. Bush, meeting with French President Nicolas Sarkozy and European Commission President Jose Manuel Barroso at Camp David, did not announce a date or site for the summit. But Sarkozy suggested it be held in the shadow of Wall Street before the end of November. European markets opened strongly Monday after solid gains in Asia, with financial stocks doing well on hopes that the crisis in the markets has abated amid signs banks may be less wary of lending to each other. In spite of the early rally, confidence in the markets remains fragile given last week's extreme volatility and interbank lending rates that remain abnormally far above central bank benchmarks, a sign of distress in credit markets. World Financial Crisis: India's Hurting, Too There's no mistaking that the global financial crisis has found its way to India's shores at a time when the country is in no shape to weather it. The stock market is choppy, there's been a credit squeeze, interest rates are up, and banks continue to rein in loans as inflation hovers at 12%. Growth has slowed from the heady 9% of a year ago to 7.9% for the three months ended in June, and its forecast to grow only at 7.5% for the fiscal year ending next March. Meanwhile, an already weak currency ended Oct. 8 at 48 rupees to the dollar, its lowest level in 5½ years. The rupee has taken a 21% dive since January. The central bank's rate cut, which the bank statement calls "ad hoc and temporary," is likely to infuse $4 billion in domestic liquidity and shore up the rupee by selling dollars. As the global financial crisis began unfolding in the first nine months of 2008, foreign institutional investors pulled out close to $10 billion from India, dragging the capital market down with it. The liquidity crisis, coupled with the credit squeeze and a weak currency, is already hurting various sectors. Banks have reined in retail financing, affecting home and auto loans. Car loans account for 70% of consumer auto purchases now, down from 85% a year ago. Meanwhile, consumers are deferring other purchases while financiers have been logging a drop in loan disbursal rates. "We are tightening our lending norms to certain customer segments," says N.R. Narayanan, general manager of vehicle financing at ICICI Bank (IBN), India's largest private-sector bank. Industry insiders say ICICI expects a 35% dip in disbursals this year, far underperforming the industry average of 16%. Narayanan says it plans to increase auto loan rates by 75 basis points to 100 basis points soon, which will further crimp sales. In August, industry wide sales fell 5%. The corporate sector is struggling, too, as expansion plans and merger activity are pushed to the back burner. With the capital markets drying up, and curbs imposed on external commercial borrowings, corporate India has been looking at alternate routes to raise money. Private equity players say listed and unlisted companies are approaching them for finance, offering 20% to 30% returns from the first year. And big Indian conglomerates such as Tata Group and Birla Group are looking at rights issues to raise money. The weak rupee is of little help to exporters. Just last November, the textile and apparel industry was reeling from an 11% appreciation of the rupee, as U.S. and European clients were negotiating contracts and looking for cheaper alternatives to source garments. This time, though, the rupee has depreciated 21% in the past nine months, but the industry is still struggling. The gains from a weak rupee are offset by rising input costs—cotton prices have increased 30% in the past year—the high cost of borrowing, and the financial turmoil in their main export markets, the U.S. and Europe. Export companies like Gokaldas whose clients include Nike (NKE), Reebok, Adidas (ADSG.DE), and Tommy Hilfiger have been majorly hit. The IT sector, which should have been a beneficiary of the weak rupee, is also concerned about the future. The U.S. still accounts for more than half of the global revenues for major players such as Tata Consultancy (TCS.BO), Infosys Technologies (INFY), and Wipro (WIT), with banking and financial services pitching a major chunk. But the Wall Street crisis and the U.S. slowdown are expected to delay client orders and defer long-term project decisions. Compiled by: Rohit Sinha

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Knowledge Desk The three disasters of the finance sector - Lehman Brothers, AIG and Merrill Lynch The global finance sector has been absolutely dynamic in the past month. The sudden switch in ownership and bankruptcy of many a firm has indeed left the common man feeling insecure about his money and his bank, but the fact of the matter is each of the takeovers and the downfalls were expected but not publicized prior to the actual happening. Above it all what are the different companies that don‘t exist anymore and which are the ones that have been taken over in this financial crisis which is being oft compared with The Great Depression of 1929-1930? The first major downfall is that of the Lehman Brothers filing for bankruptcy. The same days newspapers also carried headlines about Merrill Lynch and AIG. Markets worldwide were and still are reeling from the after effects of the triple shock of Lehman Brothers going into bankruptcy, Merrill Lynch being sold to Bank of America in a distress sale for $ 50 billion, and AIG asking the Fed for a $ 40 billion bailout. Lehman Brothers, which has survived over 150 years, finally went into Chapter 11, putting tens of thousands of jobs at risk all over the world. It said it was making the move to "protect its assets and maximize value" Merrill Lynch and Lehman both expanded aggressively into property-related investments, including so called sub-prime mortgages - loans to people on low incomes or with poor credit histories. The bank has lost $14bn in the past 18 months after being forced to take huge write-downs on the value of those investments. The Fed, and the US Treasury, had been hoping to secure a savior for Lehman ahead of the Asian markets opening on Monday. Initially, Barclays had announced a possible rescue by Barclays but it pulled out of a rescue takeover of Lehman after 72 hours of discussions led by US authorities anxious to avoid the firm going bust. Bank of America had also been in talks to acquire Lehman but has instead turned its attention to Merrill Lynch, which many feared could be the next victim of the credit crunch. The breakdown in talks between Barclays and Lehman came after government officials and senior Wall Street executives gathered for a third day at the US central bank, the Federal Reserve, in lower Manhattan. One of the items on the agenda this weekend has been an attempt to establish how much money the bank owes to other financial institutions - the big banks are all interwoven through often arcane financial dealing. The collapse of Lehman sent traders rushing into government treasury bonds – seen as a safe haven in troubled times. The dollar fell against both the euro and the yen. Finally on September 17 th, a partial relief came in the form of Barclays, which walked away from a merger deal with Lehman Brothers, said that it had reached a pact to buy certain assets of the beleaguered US insurance giant for $1.75 billion. Barclays, the third largest bank of Britain said it would acquire the North American investment banking and capital markets businesses of Lehman Brothers. The bank said it would acquire trading assets with an estimated value of $72 billion and liabilities worth $68 billion for a cash consideration of $0.25 billion and also buy Lehman's New York headquarters and two data centers in New Jersey for a combined value of $1.5 billion. In a bid to save financial markets and the economy from further turmoil, the U.S. government agreed to provide an $85 billion US emergency loan to rescue the huge insurer AIG. The Federal Reserve said in a statement it determined that a disorderly failure of American International Group could hurt the already delicate financial markets and the economy. The problems at AIG stemmed from its insurance of mortgage-backed securities and other risky debt against default. If AIG couldn't make good on its promise to pay back soured debt, investors feared the consequences would pose a greater threat to the U.S. financial system than the collapse of the investment bank Lehman Brothers. The worries were triggered after Moody's Investor Service and Standard and Poor's lowered AIG's credit ratings, forcing AIG to seek more money for collateral against its insurance contracts. Without that money, AIG would have defaulted on its obligations and the buyers of its insurance — such as banks and other financial companies — would have found themselves without protection against losses on the debt they hold. Merrill Lynch, the other Wall Street major, narrowly avoided Lehman's fate by agreeing to be bought by Bank of America for USD 50 billion – again raising the specter of an uncertain future for its thousands of global employees. Bank of America Corp. said on the 15th of September it would acquire Merrill Lynch in an all-stock transaction worth about $50 billion that should lift the uncertainty shrouding Merrill since the start of the credit crisis over a year ago. Under terms of the transaction, Bank of America would exchange 0.8595 shares of Bank of America common stock for each Merrill Lynch common share. The deal values Merrill at $29 a share.

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Knowledge Desk That represents a 70 percent premium over the brokerage‘s Friday closing price of $17.05, but well below what Merrill was worth at its peak in early 2007, when its shares traded above $98.Merrill‘s stock dropped further last week as the then ailing Lehman Brothers Holdings Inc. raced to find a buyer and which eventually filed for bankruptcy. Strategically, most industry analysts are saying it‘s a good fit. If the deal goes according to plan, Bank of America will be able to offer Merrill‘s retail brokerage services to its huge customer base. There is not a great deal of overlap between the two companies — Bank of America does have an investment bank already, but it has never been terribly strong. Where there is duplication, however, the combination of the two companies could result in more layoffs. Both Merrill and Bank of America have already cut thousands of investment banking jobs over the past year and the deal does not come without risks to Bank of America. Merrill Lynch, like many of its Wall Street peers, has been struggling with tight credit markets and billions of dollars in assets tied to mortgages that have plunged in value. Merrill has reported four straight quarterly losses, and its stock has been sliding. The American market was greatly affected by these three major occurrences and the world market on the whole is greatly affected by the American market. The Monday when all the three reports were observed together can by far be called the day when it ALL went wrong, giving all the danger signals to investors, with most of the financial institutions world over ailing and finding ways to survive. Compiled By: Kavitha Koteeswaran

Brain -Teaser !!! Ten people land on a deserted island. There they find lots of coconuts and a monkey. During their first day they gather coconuts and put them all in a community pile. After working all day they decide to sleep and divide them into ten equal piles the next morning. That night one person wakes up hungry and decides to take his share early. After dividing up the coconuts he finds he is one coconut short of ten equal piles. He also notices the monkey holding one more coconut. So he tries to take the monkey's coconut to have a total evenly divisible by 10. However when he tries to take it the monkey conks him on the head with it and kills him. Later another person wakes up hungry and decides to take his share early. On the way to the coconuts he finds the body of the first castaway, which pleases him because he will now be entitled to 1/9 of the total pile. After dividing them up into nine piles he is again one coconut short and tries to take the monkey's slightly bloodied coconut. The monkey conks the second man on the head and kills him. One by one each of the remaining persons go through the same process, until the 10th person to wake up gets the entire pile for himself. What is the smallest number of possible coconuts in the pile, not counting the monkeys?

[ Answer on page 8 ]

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Bulls Eye View (1) Reserve Bank cuts repo rate to ease credit squeeze The Reserve Bank of India slashed its key short-term interest rate – Repo rate – by one percentage point to 8 per cent, as part of its ongoing efforts to ease the pressure in the credit market. The sharp 100 basis point cut in repo with immediate effect is seen as a clear signal to banks to reduce interest rates. The repo is the rate at which the RBI ends money to banks against the collateral of government securities. This has been done as banks need to ensure their asset-liability balance as many of them have recently hiked deposit rates.

Sensex gains 247 points in a volatile market The Sensex ended a volatile session on 20th October with a gain of 247 points, after three days of continuous decline. The benchmark index closed at 10223.09, up 2.48 per cent from Friday‘s close. The Nifty closed at 3122.8, up 1.58 per cent. The markets opened on a positive note taking cues from the Asian and European markets. The Sensex went up as much as 562 points in intra-day trade, but started its descent at noon. RBI‘s move to cut the short-term lending rate did not stop foreign institutions from selling; FIIs were net sellers for Rs 816.79 crore, while domestic institutions were net buyers for Rs 216.43 crore.

Approval sought for issuing oil bonds worth Rs 65,942 cr Mr. P Chidambaram sought Parliament nod for issuing oil bonds worth Rs 65,942 crore to oil marketing companies towards estimated ―under recoveries‖ on account of sale of sensitive petroleum products. Also, approval has been sought for providing fertilizer subsidy amounting to Rs 38,863 crore, issuing fertilizer bonds worth Rs 14,000 crore, payment of estimated Rs 21,000 crore towards the recommendations of the Sixth Central Pay Commission, payment of Rs 15,000 crore towards farm debt waiver and Rs 10,500 crore towards the National Rural Employment Guarantee Programme (NREG).

Ranbaxy promoters sell stake off-market to Daiichi Sankyo Putting to rest all speculation on the status of its deal with Daiichi Sankyo, Ranbaxy Laboratories Ltd on Monday announced that the Japanese Pharma company has acquired 52.5 per cent of the company. This includes the 22 per cent acquired from the Singh family in an off-market deal, 20 per cent bought earlier through the open offer, and balance by allotment of shares through preferential basis. The entire deal will be completed after Daiichi Sankyo acquires another 12 per cent stake held by the Singh family over the next few days, which will take its total share holding in Ranbaxy to about 64 per cent. The deal with the promoters had to be taken offmarket after the Securities and Exchange Board of India declined permission to carry out the stake sale through stock exchanges.

SEBI warns of stern action against lending shares overseas SEBI warned FIIs that overseas lending and borrowing of Indian securities could result in stern measures. SEBI wants the data to see if there is any correlation between overseas lending of these securities and domestic sale of shares by FIIs. That FIIs have sold equities worth more than $11 billion in 2008, dragging down Indian stocks, has been of concern to the Government and the regulatory authorities. SEBI is apprehensive of FIIs selling the securities as P-Notes to other FIIs, who could involve in short selling.

19% dip in passengers for domestic airlines in Sept The latest data released by the Directorate-General of Civil Aviation (DGCA) shows that 10 domestic scheduled airlines reported a drop of 19 per cent in the number of passengers carried during September this year compared with the corresponding period in the previous year. Incidentally, this is the fourth successive month that the industry has reported a slow down after recording growth for more than a year. During September, the industry flew 6, 24,000 fewer passengers at 26.76 lakh passengers than what was carried the previous year. Kingfisher Airlines, which flew 4.09 lakh passengers, JetLite, the 100 per cent subsidiary of Jet Airways which flew 2.39 lakh passengers, and Paramount Airways, which carried 45,000 passengers, were the only three airlines that did better this September compared with the previous year. The biggest loser was Air Deccan, which flew 2.43 lakh fewer passengers during September followed by Indian (1.46 lakh fewer passengers) and Jet Airways (1, 00,000 fewer passengers

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Bulls Eye View (2) Cell to study why diesel use is rising The Petroleum Planning and Analysis Cell, intrigued by the constant rise in consumption of diesel, despite the fluctuations in crude oil prices has decided to undertake a study on the consumer pattern of the product. Domestic consumption of diesel, which is essentially a transportation fuel, has been seeing a growth of 18-20 per cent. For April-September of the current fiscal, diesel consumption saw an average growth of nearly 12 per cent against about 8 per cent for petrol. Industry watchers feel that there is a need to reduce the pace of increase in diesel consumption since the revenue loss on diesel alone accounts for over 50 per cent of the total under recoveries suffered by public sector oil marketing companies on retail sale of four petroleum products - petrol, diesel, kerosene and LPG - at controlled price. In 2007-08, revenue loss on diesel stood at Rs 35,166 crore of the total under recovery on four petroleum products of Rs 77,123 crore. Keeping in mind the above scenario it is essential to conduct a study on this. US nuclear players press India for liability framework The US private sector firms, which do not have their national government guarantee for accident claims, are lobbying hard with the Indian Government to lay down a policy framework on the issue of nuclear liability - or the cost of damages to be borne in case of an accident involving US-supplied nuclear power plants. GE and other private sector US firms have been seeking India‘s ratification of a new global compensation convention that is in the works and the simultaneous adoption of domestic legislation on the issue. The nuclear liability issue is also linked to concerns over the kind of ‗fuel cycle‘ policy that India would adopt if the private sector is allowed entry into the nuclear generation space. According to the World Nuclear Association, countries around the world broadly follow two kinds of fuel cycle policies — ‗open‘ or ‗closed‘. Industry to press for duty benefits on all steel products Representatives of the steel industry on Saturday decided to urge the Government to extend duty benefits to all steel products in view of falling global steel prices. The products would include hot rolled steel, cold rolled steel, plates, GP/GC sheets, re-inforced bars (commonly referred as TMT bars), angles, channels, joists, billets and pig iron The benefits would include a 15 per cent import duty (which is nil now), abolition of existing five per cent export duty, restoration of DEPB benefits, and reintroduction of 14 per cent countervailing duty. Domestic steel manufacturers had come under pressure following a slide in global steel prices post-July. This has resulted in building up inventories and consequent liquidity crunch. Currently, international steel prices are lower than Indian steel prices which are making imports more attractive to large consumers. Green and intelligent Real Estate Green and intelligent buildings are fast becoming the norm as developers and buyers see concrete value in them. Green buildings are about environment and natural resource conservation and creating an ambience that contributes to improved efficiency and human health. Intelligent buildings are about automation systems that bring in the precision of a modern factory into the office and home. Whether it is the lights, water, electrical and electronic appliances or access to people and material — everything is automated enabling conservation and efficiency. In addition, automation brings in two invaluable features to a buyer — security and comfort. The world is in for a Slowdown or recession? ―The world is likely headed for a deep recession‖ says Paul Krugman 2008 Nobel Prize Laureate for Economics. But what is recession? Many mistake economic slowdown for recession. Textbooks define recession as a period of two consecutive quarters of negative economic growth as measured by a country‘s GDP and is expected to last anywhere between six and 18 months. Slowdown, on the other hand, is just a slower growth in economic activities. While a slowdown is industry specific, a recession results in a wide ranging impact. Compiled By: Sanjana Bhuwalka Abir Zara Khan Ishita Singh

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Jargonomics Loan syndication It is the participation by a group of lending institutions as financiers to a single borrower, so that no institution has a high exposure. The borrower may select a bank to arrange for syndication after reviewing Bids from different banks. The syndicating bank then invites the participation of other banks for which a detailed write-up (Information Memorandum) may be circulated. Although the borrowing company signs a common document (containing clauses relating to term, interest, repayment and security), drawn up by the syndicate manager, it has a distinct contractual relationship with each of the syndicate members. In syndication, the interest charged by member banks may differ, unlike in a consortium arrangement. Loan syndications can be arranged to finance term requirement or working capital. The interest rate which may be fixed or floating mainly depends on the credit standing of the borrower. Thus the creditworthy borrowers may find syndication more advantageous.

Private placements The sale by a company of its securities, to one or few financial institutions, through a process of direct negotiations or to a limited number of individual investors. In contrast, the conventional method of public issue invites subscription from investors in general. The advantage of a private placement is the substantial saving in marketing expenses that a public issue entails.

Straddle A combination of a call and put option involving the same security, at the same exercise price and for the same time period. The buyer of a straddle is speculating that the underlying security‘s price will deviate up or down significantly before the options expire. Other combinations are a ‗Strip‘ (two puts and one call), a ‗Strap‘ (two calls and one put) and a ‗Spread‘ that involves the purchase of one option and the sale of another, both on the same security. In a spread the exercise prices or the Expiration Dates may differ.

Jobber An individual who specializes in one or a few stocks. A jobber buys and sells on his own account and profits from the price differential which is known as the ‗jobber‘s spread‘. His function of quoting Bid and Asking Prices, i.e., making a market, imparts liquidity to the stocks that he specializes in. On the Bombay Stock Exchange the jobber is also known as Taravniwalla.

Compiled By: Uzma Rizvi

Market Watch GLOBAL CAPITAL MARKETS (21st Oct, 2008)

FOREX MARKETS

BSE SENSEX S&P CNX NIFTY Dow Jones Industrial Average NASDAQ Nikkei Hang Seng Straits Times

10223.09 3122.80

Re/US$

48.995

Re/Euro

65.79

8852.22

Re/Pound

85.136

1711.29 9306.25 15041.17 1920.79

Re/Yen

0.4905

Re/Yuan

7.17

CAC 40 DAX FTSE 100

3475.40 4784.41 4229.73

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Economics Noble Prize Winner: Paul Krugman Paul Krugman, a professor at Princeton University and an Op-Ed page columnist for The New York Times, was awarded the Nobel Memorial Prize in Economic Sciences on Monday, 13th Oct,08. Mr. Krugman received the award for his work on international trade and economic geography. In particular, the prize committee lauded his work for ―having shown the effects of economies of scale on trade patterns and on the location of economic activity.‖ He has developed models that explain observed patterns of trade between countries, as well as what goods are produced where and why. Traditional trade theory assumes that countries are different and will exchange different kinds of goods with each other; Mr. Krugman‘s theories have explained why worldwide trade is dominated by a few countries that are similar to each other, and why some countries might import the same kinds of goods that it exports. . This kind of trade enables specialization and largescale production, which result in lower prices and a greater diversity of commodities. Krugman's approach is based on the premise that many goods and services can be produced more cheaply in long series, a concept generally known as economies of scale. Meanwhile, consumers demand a varied supply of goods. As a result, small-scale production for a local market is replaced by large-scale production for the world market, where firms with similar products compete with one other. Economies of scale combined with reduced transport costs also help to explain why an increasingly larger share of the world population lives in cities and why similar economic activities are concentrated in the same locations. Lower transport costs can trigger a self-reinforcing process whereby a growing metropolitan population gives rise to increased large-scale production, higher real wages and a more diversified supply of goods. This, in turn, stimulates further migration to cities. Krugman's theories have shown that the outcome of these processes can well be that regions become divided into a high-technology urbanized core and a less developed "periphery". Mr. Krugman received his B.A. from Yale University in 1974 and his Ph.D. from MIT in 1977. He has taught at Yale, MIT and Stanford. At MIT he became the Ford International Professor of Economics. Mr. Krugman is the author or editor of 20 books and more than 200 papers in professional journals and edited volumes. His professional reputation rests largely on work in international trade and finance. In 1991 Mr. Krugman received the John Bates Clark medal, a prize given every two years to ―that economist under 40 who is adjudged to have made a significant contribution to economic knowledge.‖Mr. Krugman continues to teach at Princeton. This semester Mr. Krugman is teaching a small graduate-level course on international monetary policy and theory, covering such timely subjects as international liquidity crises. In recent years he has also taught courses on the welfare state and international trade, as well as all-freshman seminars on various economic topics. Mr. Krugman was the sole winner of the award this year, which includes a prize of about $1.4 million. Compiled By: Nidhi Gupta

Brain -Teaser !!! (Answer )

[ Refer page 4 for question ]

Answer: 2519 The solution for the answer is the LCM (Lowest Common Multiple) of 10,9,8,7,6,5,4,3,2,1 -1. LCM would give the least number which is divisible by all of these numbers and subtracting one would give us the number of coconuts which were initially there.

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Editorial Team Editors : Abir Zara Khan, Deepika Pandey, Gautam Lunawat, Ishita Singh, Kavitha, Nidhi Gupta, Rohit Sinha, Sanjana Bhuwalka, Uzma Rizvi, Varun Bhagath Mentors : Puneet Thakur , Vishal Pasari Disclaimer: This newsletter is just a compilation of news from various sources. Thus, readers are expected to cross-check the facts before relying upon them. Though much care has been taken to present the facts without error, still if errors creep in, necessary feed backs will be always welcomed. Editors will not be responsible for any undertakings. The newsletter is not meant for sale and hence, no part of the newsletter should be used without the prior permission of the editorial team.

Sources: The Economics Times, The Hindu BusinessLine, Times of India, Business Standard, Financial Express, Financial Times, Business Week, Business World, The Economist, Wall Street Journal, Bloomberg, Reuters, Moneycontrol.com, Vccircle.com, yahoofinance.com,

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