Intellectual Thoughts by Sanjay Panda: January 2010

I pad the lattest from apple

Apple finally unveiled, labeled as the next-generation gadget which will bridge the gap between smart phones and laptops named as iPad. It's a half-inch thick and weighs about 700gm, with a 9.7-inch capacitive touchscreen IPS LCD display running with a Apple A4 Chip with a 10-hour battery life.

It'll be available in 3 different disk space of 16, 32, and 64GB. Starts at $499 for 16GB, 32GB for $599, and $699 64GB. Adding 3G costs a $130 per model, so the most expensive model (64GB / 3G) is $829. The WiFi-only model will be available in March , and the 3G models in April2010.

Few disappointments are no multitasking, no camera, no flash playability.

Another Bubble likely

A year ago investors were panicking and there was talk of another great Depression. Now the share prices in all most all the economies are 70-100 % higher than their respective lows of 2009. This was mostly due to interest rates of 1% or less in America, Japan, Britain and the euro zone, which have persuaded investors to take their money out of cash and to buy risky assets.

Central banks see these market rallies as a welcome side- effect of their policies. The market rebound was necessary to stabilise economies last year, but now there is a danger that bubbles are being created. Apart from high asset valuations, the other symptoms of a bubble are rapid growth in private-sector credit and an outbreak of public enthusiasm for some particular assets. The longer the world keeps its interest rates close to zero, the greater the danger that bubbles will appear and its most likely in emerging markets specially China.

The remedies could be forcing banks to adopt higher capital ratios which will curb speculative excesses apart from the interest rate which clould me a major tool to curb speculation. But central banks are wary of using these measures to pop bubbles because it risks of crushing growth as well. Current scenario of high asset prices, low interest rates and massive fiscal deficits seems unsustainable.

Interest rates will stay low only if growth remains slow. But if economies grow slowly, then profits will not rise fast enough to justify current share prices and incomes will not rise far enough to justify the prevailing level of house prices. On the other hand, if the markets are right about the prospects for economic growth, and the current recovery is sustained, then governments will have to react by cutting off the supply of cheap money.

Water crisis- Immediate action required.

Nearly all large cities in India are in the grip of a serious water shortage, and it isl ikely to get worse in days ahead. As global warming makes the weather more unpredictable, the water economy of urban India will have to be planned without depending on reservoirs getting routinely filled up by rain every year. The solution to the cities’ water problem has to be sought mostly within the cities themselves by trapping rainwater, saving water and recycling as much of waste water as possible.

May be a part of the solution lies in simply running the water utilities better. Another solution lies in regulating and pricing the exploitation and use of groundwater. If this is not done, then groundwater levels will keep travelling lower and start scripting a disaster in the not too distant future. Water use has to be charged through pricing reflecting long-term sustainable cost. There need be no controversy over whether poor slum-dwellers should be made to pay because they already are, often with money and invariably with their time.

Few good examples cld be, Chennai has now a well-established system of mandatory water harvesting and the Hubli-Dharwad's infrastructure, efficient delivery and recovery of user charges have enabled 24x7 supply of affordable water.

Its time now for other cities to follow and replicate if they cant better it.