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Wednesday, February 21, 2007

Guest book

This is space for comments of a general nature.


  1. Perhaps you could post your thoughts on what the upcoming budget will look like, or comment on it after its released.

    Excellent blog by the way, I always look forward to new posts. I wonder what percentage of your readers are within India vs. outside


  2. Excellent Blog, Ajay !
    Perhaps you could post about your views on career for Indian finance professionals in the fields of Financial Engineering / Risk Management / Derivatives

  3. It fluctuates by time of day. In Indian time there are more Indian readers. As of 10 PM on Sunday (25 February) the distribution of "recent" users is: India (53%), US (14%), Australia (6%), UK (5%), Hong Kong (4%), etc.

    But these numbers reflect visitors to the blog on the web only. A lot of dissemination is happening in ways that I can't count. I put the full text of the blog entry into the RSS feed, which is getting pushed out into various RSS feedreaders, RSS->email, republication of the RSS feed by other services, etc. I believe most of my readers never show up at this web page. So one really doesn't quite know where it's going.

    I believe that roughly two-thirds of the readership is in India.

  4. Excellent, incisive blog. Always top class analysis on financial markets. You provide a high level view. I think You are the right person to give a road map for Indian finance professionals in the areas of financial engineering,Quantitative finance. I think most of the finance courses in MBA are bland lacking in sophistication, rigor and intellectual depth. Any universities offering computational finance or financial engineering. You remind me of NN Taleb of fooled by randomness.

  5. Hi Ajay - Came across your blog while browsing some comments on FRBMA. Excellent work and really good analysis. I work as Economist for BMR & Associate. In fact it is a coincidence of sorts that yesterday only my senior Mukesh Butani and I were appreciating your recent article in BS.

    Best regards
    Tanmoy Chakrabarti

  6. Do let us have your thoughts on outcome budget. De-finance the contribution, if you like. Lets see Ajay Shah contribute to the welfare administration.

  7. Hi Mr Ajay Shah,
    I am a researcher and nowadays dealing with Indian economy. I need some basic information about the monetary policy of RBI. I have looked at it s web page several times but could not find general statement of MP. I mean main frame or it using inflation targeting or something else and besides what is the exchage rate policy what are the operational tools and so on.
    thanking you in advance.

  8. Excellent Blog, Ajay !
    Perhaps you could post about your views on career for External Commercial borrowings.
    I appreciate your blog indeed!

  9. Mr Ajay Shah I was lucky to be your class where in you had delieved a lecture in Goa on while I was doing my post graduation, thought it was just one hour it was really fascinating to be in that part ...
    then after 4 years i am in touch through urs blog its nice please enlight all the reader on net with your power of thoughts looking forwards

  10. CNBC does a good job of bringing experts views to junta at large (like me) but most of the times the experts do a poor job of explaining the world around and taking a clear stand. More annoyingly, a huge recency effect reflects in their analysis.

    In that background, your comments on credit policy today were refreshingly insightful. I wish more experts could be like you.

    Looking you up landed me at your blog which I realize, is a great source of learning on key economic and financial issues in our country.

    Hats off !!

    - A fellow BITSian (only a decade younger)

  11. I really like your blog and always look forward to a new post every day. I am one of your non-India users who uses RSS feed to read the blog and actually hardly visit your page!
    I really like your latest post 'Don't sweat the quant stuff'. Keep it coming!!!

  12. Am based in HK and would like to send you some questions for a magazine feature on the Indian economy - what is your mail id?


  13. The tragedy of cotton farmers committing suicide in Maharashtra and not Gujarat is discussed very well. There are lessons to be learnt for the public policy in the country. Circulated the article to the candidates going for the IAS interview.

    Thanks a lot Mr.Ajay Shah.

    God Bless You

    srirangam sriram

  14. It takes me hours to figure out what you write. Why don't you put less strain on your brain and write simpler English, atleast you can try to.

    Oh well, I can too try to improve my vocabulary.

    Perhaps, we can try both.

    Higher education means higher brain torture and the torture never stops, though I still love the torture and many people round the globe too, just like you seem to enjoy.

  15. I am a regular reader of your excellent blog! It has kept me follow the trends in money, banking,economics and public policy and overall economy...

    Keep the thread going...
    naraynan sethurao

  16. Dear Ajay
    I want to know what are the parameters for the stock exchanges putting a stock on trade for trade. It is very frustrating for an investor like me to buy into a stock based on technical signals only to see it being transferred to trade for trade in an entirely arbitrary manner. I had written to the exchanges also but have not received any reply as yet. Since you are so well versed in these matters I was hoping you could shed light on this matter

    Ashok Thakwani

  17. one word for ur blog - AWSOME ! keep it up !


  18. Your blogs are excellent.
    I look forward to reading each one of them as soon as they get published .in fact I read old ones again to enjoy .
    Rahul Banerjee

  19. Great work sir...
    Indeed the best blog & collection, i have ever seen on such a interesting topic...Keep it up

  20. HI Ajay, I am jinesh, I accidentally drop in to your blog and I found it very much informative and interesting. The way you have presented the topics is simply fantastic. I am especially interested in the Forex market and I got so many article on currency market. I am interested in making my career in to the currency market. Thanks for creating such a useful blog. I also wanted to ask form where I can get the book tittled "Around the World on a Trillion Dollars a Day" by Gregory J. Millman.


  21. Hi Ajay.....

    I was surfing google and finally landed into your blog..

    its nice and lot of information...

  22. Hi Ajay,

    My name is Pierre Fitter and I write for Businessworld magazine. I would like to speak with you about an article I am writing. Please let me know how I can contact you at pierre(dot)bw(at)gmail(dot)com

    Thanks a lot,


  23. Dear Ajay

    great reportorie of finance subjects. i am more interested in insurance and pensions...
    one query which i wanted to post is,
    1) Do u think pension companies have to consider mortality rate? it assumes more significance cuz of higher life expectancy rates now a days. As per my knowledge in 'annuity for life' cases, companies dont take into account life expecatncy of the customer and the annuity rate thus turns out to be unjustified and perhaps inadequate...can i have more light on this issue?

    just for the intro, i am pursuing MBA prog from IMT Ghaziabad. I worked for 5 yrs in pvt life insurance sector.

    Regards and thanks

    Diju Jose

  24. hello dr shah,
    can we have your thoughts on the sub prime woes in the US market and its contagious effects in Europe now . Alos is it the testing time for CDO markets ?

  25. HI ajay, You seem to be very knowledgeable on Indian Markets. I need some clarity. Is it possible to get in touch with you other than by way of this blog? will be more obliged than you can imagine. Please CONTACT ME AT

  26. Dear AJAY

    I must say your blog is just the best. The areas being covered and the the way they have been classified is absolutely great.


  27. I came across your name referencing an article you had written about the Farmer Suicides in a blog called India Indeed. So checked your blog out, great stuff! You obviously know what you are talking about!


  28. excellent article on the SWF funds...i am looking forward for your other posts.

  29. As a student from IGIDR, I feel great to have taught by Dr Ajay Shah. I was never a voracious reader about financial markets but your blog has made easy to understand and very interesting at the same time.

    Very interesting and brain storming reading indeed!

    Ekta Selarka

  30. I came across your blogs today and found them most intersting and informative.Your profile, an excellent rarely found.

    In your today's blog on 'rupee policy' you mentioned about MSS Issuance by RBI, may I request you to kindly explain what is MSS Issuance?

    Girish Shah

  31. Superb analysis!..i am also a regular reader of your column, and its always informative.

    Heres my blog

    stop by and take a look..
    anyfeedback/comments would be great.

  32. I have been reading your blog for abt a month. Its been amazing how much i have learnt thru your blog...Keep posting the way you do, i have only one suggestion, plz expand the variety of your posts (finance is huge!)...but truly yours is the best blog I have ever come acros coz its simple, relevant & current...Thx a ton

  33. Superb Blog!!
    If you remember i met you on the flight to Delhi from Mumbai.You suggested me to read your blog and then i was completely clueless.
    Since then i have been reading your blog and it gives great insight into the finance stream to enhance my knowledge of a MBA.
    Keep up the good work
    Archit Singhal

  34. Hey Ajay,

    I've read your blogs and various articles on NPS..those are really quite informative. There are some serious concerns about the unorganised sector bill, I feel you can throw much light on. Right now I just need to know can anybody become a CRA and operate on its own for the micro segment of the society without any govt approvals?

  35. Congrats! Yours is one of the best blogs on Indian capital markets I have come across. I am a fan of NIFTY BEES myself.

    I liked your article on high fund management costs in India. During my recent visit to a well known Shahrukh-Khan-endorsed bank, they tried to hard sell a ludicrous insurance and MF combo (called ULIP or smth)...the exhorbitant fees made me wonder if the AMCs are getting away with murder in India? I work in a bank myself so have nothing against cross-selling but they should respect the fact that clients do have some IQ.

  36. Not exactly blog-related, but I'm teaching myself maximum likelihood estimation in R, and I found your page on MLE estimation of OLS models to be incredibly helpful in figuring out how to get started. Thank you for posting it on the web!

  37. Hello Sir,
    I regularly read through your blog( at least skim through it) but most times can't make out much of the financial terms.I'm an engineering under grad but would like to understand the mechanics of our financial systems.Can you suggest some good books which can help me in making sense out of your blog posts.
    Thanking You,

  38. This blog is definately a bookmark :)

  39. Hi Ajay, your blog is a must read for me from time to time - though I also generally catch up on your columns on BizStd.

    Newsweek's recent issue talks of $200/barrel oil. Goldman Sachs has made that prediction. There are blogs out there like seekingalpha etc where some folks have written about a future price of crude oil @ $300/barrel.

    I am in disbelief over whats going on in the Crude oil market. This reeks of a global contagion. Sure the Oil rich countries will be richer but something seems to be wildly amiss.

    I am scared that the way things stand if $150/barrel oil does come to pass, and the oil bonds issue becomes a Fiscal deficit issue (I havent read about your opinion on the FRBM yet I wanted to write this note first - FRBM Act, I am sure was stillborn anyway). If the new Fin.Min next year has to balance the economy, he will have no choice to keep raising Petrol/Diesel and Gas prices till there is some ongoing balance. This will probably have a highly inflationary impact most definitely. I see that last 5 years of economic growth being reversed in the next 3 years. It may be far-fetched but a recession most likely anyway.

    What are your views on this and the big question - Are these oil prices really in a bubble, or we should be living scared about our way of life?? I mean should the mantra be Conserve, walk, cycle, use public transportation and say good buy to my Honda car.


  40. Hi Ajay, what are your views on the illiquidity that persists in Stock Options in India. The traded volume & OI have been continuously dwindling. Can a change in the strike parameters make a change or would physical delivery be an important element ?
    It appears that due to the fear of post market exercise, even for a few ruppes profits by option buyers, the sellers are not coming forward. Would love to hear your views.

    Arvind Goyal

  41. Would like to know your views on High crude ; curtailed Dollar movement in indian market by RBI and simultaneous effect in eroding of our Dollar deposit surplus...Will the shift parameter in Globe related with crude and rise of nations with alternate energy search rule the game in future.Doesn't it gives us impetus to strengthen our public transport system and giving tax sops for Hybrid buses for conveyance of staff, or may be going harsh way to remove depriciation on LCVs to corporates.Should govt try to curtail Govt Expenditureand Divest in some of the PSU's to move surplus money to required infrastucture processs and give boost to Exports sector. Also should we not create a draft white paper on How in Next 10 years we as Indian will rule some of the industry as source to World. - Abhinand

  42. Kindly inform us of the seminars and workshops you are conducting / taking part in…..I remember one by you long time back at Taj Palace, New Delhi. It was a CMIE users meet.
    It will be nice of you if could inform us when you will be taking a work shop…...or conducting a seminar.
    Your effort to educate us through the blog is much appreciated.
    In deep admiration
    Anand Kamal
    Mobile: 98100-18830 (New Delhi)

  43. Dude, your articles are careful and thoughtful. But there is an underlying assumption that people are sweet and want change for a beautiful future! That is wrong with reference in India. There is an established mafiosi controlling politics in any guise and form, an absence of law, an absence of an honest police force and a preponderance of deceitful rougues in business. Top that off with the average citizen's proclivity to lie and cheat. Maybe when you come down from la la land you will plot that into your equations. (one of these days you should get off the financial high horse and travel through India and get a rude dose of the future)

  44. Ajay, it was nice to attend your Currency Futures presentation at Delhi today. The last time I heard you was in 1995 when you came to delhi while NSE was being formed. It is always a pleasure to hear you talk.

    Alok Jain
    Rohini Capital Services Limited

  45. Ajay, on the context of whether resident indians can trade marginable products, i looked up the RBI site and found point 13.3 pertinent in the folliwng link :
    Would appreciate your views. I think it clearly prohibits trading in futures. my email is thanks
    Alok Jain

  46. I scanned your labels for the word "poverty" and could not find. You seem to a more of a financial economist but still your views on the topic of poverty will be (I guess) worth looking for.
    Poverty is one thing that surprises me so much because, we just haven't been able to tame it(Despite the efforts & resources diverted to it). Some day we will have a pop-in cure for cancer, I am not sure about the same for Poverty. I would like your views on that topic.

    Secondly, One suggestion here, you can add the "search blog" feature offered by blogger to your blog, it will make easier for people searching specific information.

    Great Blog!

  47. Mr. Ajay,

    Considering your pro-activeness in posting comments on financial matters, I am surprised at your silence on the current trumoil in the global markets.

    Any views (review?) on your suggestions on functioning of Central Banks (made in the recent past) especially in the light of the current siutation/actions??



  48. 1. Why do so many male economists have a beard ?

    2. Why do most Indian female economists dress so simply and boringly ?

    Is it not "cheap signaling"..why define ones profession by the attire..

  49. Excellet blog...

    Could you help me in getting the book on Indian Financial Services penned by you?...

  50. The financial crisis has seen varied responses from the RBI and the govt- using monetary policy and fiscal policy as tools. Could you throw some light on when would a monetary policy response be more effective than a fiscal policy response and when would the converse be true? Also, what would the govt need to do when both of them fail? If you were the finance minister, how would you respond to the financial crisis(having the benefit of hindsight)- in terms of stimulus packages..etc...?

  51. Now with every economist and analyst worth his hat forecasting a 4% Indian GDP growth for FY10, I am waiting for a 2% GDP forecast..It seems the trend is 'Smaller the sexier' . Just like fashion, this seems like a race toward size zero..Although economists were never known for their affinity for high fashion

  52. Ajay :

    Excellent Blog ! Kudos.

    Can you write/publish something on-How can an Indian Institution/FII borrow money (finance) either onshore (INR) or offshore (USD)against Pledged Indian equities.

    Think summarizing the existing conditions and some recommendations will be of hugh interest to your readers.


  53. Dear Sir,

    I would like to know why the RBI uses WPI for its policy purposes instead of CPI to measure inflation ?

    It seems almost all countries use CPI and not WPI.

    The WPI is declining while Consumers feel the reverse when they go to market.

    Is the difference in frequency (CPI- Monthly while WPI- weekly) only reason ?

    Surely, the RBI also knows this.

  54. Have been a fan for long. Whenever sanity deserts me, I turn to your blog.
    Best wishes.

  55. Found out about your blog at and it is really good. I also have a financial blog at do you mind doing a link exchange?

  56. really good job.

    best regards from germany.


  57. Your blog is like being in touch with an intellectual all the time....every time i turn up to it i came out learning something..thanks sir.

  58. Congratulations Mr Shah for getting noticed. But what I didn't like is that you got NOTICE-d in more than one way. Wish you the best in 2010. May the truth prevail..

  59. Ajay: Enjoy reading your posts. Just thought I would point you and your readers to this interesting piece by Chris Blatman, featuring a new study involving a randomized experiment on largeish Indian textile plants in Maharashtra. The study is fascinating at two levels: First, its results. Second, as a pointer to where (a part of) the literature seems headed in terms of methodology.

  60. Rana, Thanks for your comment. I did endup writing about it: see here.

  61. How about providing a market based solution for saving tigers from extinction. though it may sound absurd, but privatizing the animal under certain supportive regulation can help increase the number of tiger. what i mean to say is that treating the tiger just as one treats the horses, the only thing would be to have a cage and people with farm houses- the really rich one would be easily afford it. this may have its own undesired consequences but it is certainly and idea to be considered.

    critics and comment invited.

  62. Hi Ajay,

    Excellent Blog. I do not know how many politicians apart from me are looking at your blog. I hope there are atlest some...

    Keep up the good work.

    -Weekend politician

  63. Just a question - are there any ETFs based on the NSE Govt Securities Index?

    Thanks in advance for the response and pointers!

  64. Dear Ajay Sir

    RBIs todays hike in repo rate is justified(BY THEM) thru the inflation figures.

    Please give us a perspective on use, effectiveness and effciency of the "monetary policy/tools" in current Indian Economic Structure-State.



  65. I am glad to have found your writing Mr Shah. Your analyses of economy and institutions are sorely needed. Please could you elaborate on what the principles of a good infrastructure for India would be?

  66. I was very lucky to 'read' your Paper "Black, Merton & Scholes----"
    (Econ & Polit Weekly 1997) It would take time to digest such Scholarly Papers.

    I wish to be benefited by your explanation for the following:

    1. While you use the general term 'economic agents', I felt woth reference to Capital Markets, the 'Economic Agents' of any importance are 'Buyers', 'Sellers' and the 'brokers'.

    2.'The Use of Derivative Markets is welfare-enhancin' (last line of subject (1) titled Financial Derivatives)

    It seems to me that Your concept of 'WELFARE' needs to be defined in this context.

    YOu have correctly (I feel) explained "through these Methods, Risk is not destroyed, it is only transferred from one economic agent to another"

    If this is so, any number of agents participating, does not destroy the risk but by the (uneven) distribution of the Risk
    in a vague manner (not as yet can be explained even by Stochatic Methods for a REAL-WORLD Market)

    As such, Welfare is not enhanced, but because the misery (losses) are shared by a grat number of agents, theoretically the 'misery' might be diminished to an individual agent (and all this, in a IDEAL MARKET with so many implausible assumtions)

    3. On p.12, you quite rightly say that "they brought about the new field of 'Continuous time Finance'

    I wish to add that since Black-Scholes Model' has an application for Option-pricing in real markets located in various geographic-locations, it is,in practice, a new field of "Continuous-time" Finance applied at 'discreet intervals of time'! (Alike to analysing a 'nonlinear system' as a combination of 'locally-linear' systems and as a B.Tech. in Aero Engg, surely you know.

    It is stupid on my part to request these clarifications after 14 years but the motive is to learn from an Erudite Scholar like you:

    If you are likely to be very busy to attend to mundane queries, I request you to pass on the Questions to any of your student-researchers to elucidate.

    With best regards


  67. Hi, I just read your article on rupee depreciation...and you explained it like a professor. I aspire to be an economist and your articles really helps me to understand complex attributes of economy, quite easily.please continue this good work. By the way, I have a question. I got admitted in a University in Japan, and my classes would start September next year. Yen has been appreciating for more than a year. Will the depreciation of Rupee against dollar mean, rupee will have faster depreciation against yen too?

  68. Dear Sir
    I read your joint paper with Ila Patnaik titled "Did the Indian capital controls work as a tool of macroeconomic policy?" The conclusions derived in the paper are that capital controls imposed in India are very porous, and were incapable of achieving the desired macroeconomic goals.
    Sir, I wish to know, whether Full Capital Account Convertibility, will have any effect on rate of flows? I am asking this because of the conclusion in the paper that capital controls have very low effect

    Raj Anmol Singh

  69. I thought you would have something to say on the budget. No links to interesting reads as well?

  70. Listened to your interview on CNBC today. Was good to see someone talking a lot of sense, being able to uncover the underlying trends prevailing in the country (by overlooking what is meaningless even though the media constantly forces that data down one's gullet), and presenting it in simple language for laymen like me!

    The optimistic closing note wrt India's long-term future was also welcome (and hopefully true!).

  71. Dear Sir,
    I am working with Member of Parliament (Loksabha, MP)as his legislative advisor
    I am attached to MP through an fellowship called LAMP fellows its an innitiative of PRS legislative research (a unit for center for Policy research) I want to ask some question to you. I would request you to please send me your mail ID on
    Thanks & Regards,
    Legislative Advisior to MP

  72. Dear Ajay:

    If you come across assessment of the damage done to India's GDP on account of the UK disaster, that would be great thing to share.

    Warm regards,

  73. Dear Ajay,

    I am listening to your interview on ET Now via youtube. Your analysis of the RBI response to the rupee slide is both insightful and correct. The problem with the CAD is fundamentally structural in nature and the slide in the rupee is simply a symptom and also stems from a lack of confidence in the govt's management of the economy. The RBIs introduction of capital controls demonstrates how desperate they are for short term fixes and the willingness to roll back many years of moving towards an open economy.

    I predicted these problems in 2011 by simply observing the complacent response and lack of urgency to the looming issues confronting India.

    It is very refreshing to listen to your straightforward and candid opinion on these issues.

    Best Regards

    Kwabena Smith
    Orun Energy

  74. Let us know what do you think of equity index based on median price change for the whole market: currently calculates and displays median equity index for India: MEXi

  75. Dear Ajay,
    Its been quite some time since we last received your "interesting reading" post. I look forward to it eagerly!


  76. Congratulations on your selection on committee on common clearing system for all commodity exchanges.

    I can see new changes coming.

  77. Waiting for your comments on views expressed by RBI Guv on FSLRC.

  78. expected an enlightening article from you on the concerns over unhedged forex exposures of corporates. Wonder who will abosrb the risk if hedging is made compulsory?

  79. Hi....what happened to the B Tech aeronautical engineering from iit bombay?....not an iota of aviation in your life after it? Good blog nevertheless....


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