Time to cut Rate or not ??

The Chinese Central bank & the Government been trying hard since last  8 weeks or so to keep the Chinese stock market rout in control.  They have taken several unprecedented steps including recent move to cut its benchmark interest rates and lowering of reserve requirements for banks (25 basis points interest rate cut coupled with a 50 basis point reduction in reserve requirement)  apart from  two successive  devaluation of the yuan against the dollar.

Chinese action has  compelled  other central Banks to review  their monetary policy .The central banks of other countries, including South Korea and New Zealand, which have lowered rates in response to growth tapering off amid shrinking global demand and crashing commodity prices.

As of now  the Reserve Bank of India’s (RBI’s)  continued to maintain  a  monetary policy stance by  adopting  inflation target and    bench marking  it  to the consumer price index.  RBI has stressed to see low inflation on a sustained basis while there is  pressure  from  the government and business community  to lower interest rates to  inject more momentum in the economy and encourage investment. 

The policy maker  argue  that the stimulus to growth has to come from other quarters and not by rate cuts only. Introducing GST, labour reform are could be  examples of such other boosts.

The inflation expectations among the public are still high — leading to a gap between what savers expect in terms of returns adjusted for inflation and the rates that corporations think they ought to be paying. 

Sometime economic sense doesn’t  align this with political sense for those who have to worry about winning elections. This is possible when economic sense permeates the public discourse, so that political leaders find the courage to argue for it, even at the expense of short-term pain.

Swiss claimed the Gold in World happiness ranks

Switzerland is the happiest place for people to live, followed by Iceland, Denmark, Norway and Canada, according to a United Nations index 2015.

  

Togo, Burundi, Syria Benin, and Rwanda  were least happy.

The annual report looks at 158 countries across the world and bases its rankings on data from the Gallup World Poll which takes into account a range of metrics that includes  not just individual satisfaction and wealth, but also broad contentment  like real  per capita GDP, healthy life expectancy,  freedom to make life choices,  perceptions of corruption.

‘Increasingly happiness is considered a proper measure of social progress and goal of public policy. A rapidly increasing number of national and local governments are using happiness data and research in their search for policies that could enable people to live better lives,’ the report says.

All things considered, it doesn't look too good for India. Already rated an unhappy place in 2014 with a ranking of 111, the country dropped six places to 117 out of 158 countries ranked in the 2015 list, which took into account data from 2012-2014. 

Pro-social behavior including honesty, benevolence, cooperation, and trustworthiness, entails individuals making decisions for the common good that may conflict with short-run egoistic incentives, the report explains.

Countries that are at the top of the rankings show evidence of high social capital, while those at the bottom show the opposite: generalized distrust, pervasive corruption, and lawless behavior

No prizes for guessing where & why  India lies!!!!!!!!!!!..

Electric vehicles ( EVs), Tesla & Lithium

 
( Pic: Tesla's web site)

Throughout modern times we have witnessed  many  advancements in technology. One  major advancement  in environmentally friendly technology is the Electric Vehicle (EV). Electric vehicles have brought about many advantages and impacts including: decreased emissions, minimal   fossil fuel usage and increased safety.

  

So what exactly a electric vehicle ( EV) is ???. EVs differ from fossil fuel-powered vehicles in that the electricity they consume can be generated from a wide range of sources, including fossil fuels, nuclear power, and renewable sources such as tidal power, solar power, and wind power or any combination of those and stored mainly in  Lithium Batteries.

The modern electric vehicle (EV)  is broadly divided into  two categories Hybrid ( and or  Plug in)  Electric Vehicles (HEVs & PHEV) and   Pure Electric Vehicles (PEVs).  HEV & PHEVs combine internal combustion engines with limited-range electric battery packs. After the battery runs out, the internal combustion engine takes over, giving the driver unlimited range as long as there is a fuel station nearby. PEVs, on the other hand, run only on battery power   &  for these battery  our  Lithium   products  are the crucial ingredients.

The PEVs are  ‘pure’ electric vehicles. Since there is no internal combustion engine (and hence, no emissions), the environmental benefits are immense. PEVs are expected to grow at a whopping 37% CAGR over the next few years and account for  3% of all global vehicles sales by 2020.  More enthusiastic estimates, predicts electric cars to completely replace  Petrol/Diesel vehicles by 2030.

Several factors are driving the growth of  EVs are:

• Decreasing battery costs, which are expected to drop by 70% by 2015 & 90% by 2018.
• Decreasing  Battery charging time.
• Better cars with a range in excess of 500 KMs (Tesla Model S).
• Innovations, such as Tesla’s electric Supercharger network.
• Prices of solar panels, widely deployed in Tesla’s Supercharger network, which have dropped by 60% from 2011.
• Improved safety of PEVs over   fossil fuel  vehicles. Tesla’s Model S, for instance, was recently awarded the highest ever safety rating by NHTSA, Euro NCAP.
• Strong public perception due to environmental benefits of zero-emission PEVs.

Altogether, the tremendous growth of electric vehicles has shaken up the automobile industry and sent most manufacturers scrambling to compete with existing industry leader, Tesla.

Tesla’s Impact 

The EV industry can be broadly divided into two periods: before and after Tesla.

The EV  industry’s ambition – to create a  fully electric vehicles that could outperform cars with internal combustion engines (ICE) – was deemed too far-fetched to be worthy of serious consideration. With limited resources, incompetent technology and lack of public interest, the industry produced vehicles that were too eccentric, too incapable or too cost-prohibitive for mass-consumption.

All this changed after Tesla. Tesla’s first stab at an EV resulted in the Tesla Roadster – the fastest ever production electric car with a top speed of 125 mph and a range of 244 miles. That it could go from 0 to 60 in 3.7 seconds and looked like a  sportscar was testimony to Tesla’s engineering capabilities. More importantly, it signalled to the broader audience that EVs had arrived on the big stage. Tesla phased out the Roadster  to focus on the more consumer-friendly Model S sedan. At a base price tag of $64,000, the Model S is significantly more affordable than the Roadster. With the company expected to launch a long-awaited SUV (Model X), followed by a low-cost consumer model, expect the automobile industry to be transformed radically in the next few years.

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Tesla’s success has triggered a panic catch-up reaction among automobile majors. GM, Nissan, Ford, VW, etc are now getting into  both  PEVs and H (P)EVs at different price tags instead of  earlier offerings of limited numbers of  HEVs  only approach. With research dollars pouring into EV R&D,  we expect  further significant  technological breakthroughs in the next few years for these  Lithium  batteries.  Further wider adoption of electric cars will also reduce battery prices   significantly as economies of scale kicks in. 

Who will reign supreme in the EV market is a matter of speculation for now. Tesla’s low-cost model could be a phenomenal hit or a complete dud, or  Tesla’s competitor might go kaput on launch or VW’s Audi A3 e-Tron could hit the jackpot with its simple design and Audi brand name.  The only thing concrete for now is  whoever wins the EV race,   Its  the   Lithium producers  getting increased  attention  due to  winds of change that have gripped the entire global  automobile industry.