India issues domestic bonds denominated in gold

The government of India began issuing bonds denominated in grams of gold in November. They are currently purchasable at post offices in denominations of 1 gram to 500 grams at the equivalent of $1194.39/oz. (2600 rupees/gram at an exchange rate of 67.7 rupees/dollar). 8-year maturity and putable at par (x grams of gold) from year 5. 2.75% coupon in rupees.

Why is India doing this? They want to reduce the current account deficit attributable to gold imports. (Also, the 2.75% coupon is lower than the government's domestic borrowing cost of 7.5%.) Consumer demand accounts for about 1000 tons of gold imports a year. So far Indian consumers have bought only 1 ton worth of bonds. This is disappointing to the government but understandable. Consumers would rather pay the 30% premium for buying coins and jewelry than trust the government to hand over the promised gold in eight years. Greater demand is likely to develop over time, however, as investors are lulled into the belief that the government will deliver the promised gold at maturity.

Will such bonds be issued in other emerging countries? It makes in terms of availability of financing at a lower cost.

BCA: S&P earnings growth negative and forward PE's are high

Even in a good economy, the US stock market is pricey. With earnings growth turning negative, it is very pricey indeed.

Who benefits from low oil prices?

Here are the top five oil importers. (data is for 2012, but it's probably fairly representative)

Japan is interesting. They benefit and their currency is relatively cheap.

Chinese imports near record levels in December. What does this mean?

The FT reported this morning that Chinese imports of oil and copper were both up 9.3% (is this some sort of luck number?) in December. Iron ore was up 11% and soybeans rose 23%. Overall imports were "near record levels." For the year as a whole, oil imports were up 9%.

http://www.ft.com/intl/cms/s/0/9b685f82-b9d8-11e5-bf7e-8a339b6f2164.html#axzz3xEevmhh8

Interesting, n'est-ce pas? But what does it signify?

Is Japan a vision of the future of the US and Europe were it not for immigration?

The FT this morning had these sober numbers describing Japan, which show plummeting number of 20-year-olds and eroding monthly earnings.  Without immigration, Japan's present would be Europe's and North America's future.  Japan, however, would rather shrink in many ways than change its culture.

See "Deflated Generation": http://www.ft.com/intl/cms/s/0/1b24264e-b9d8-11e5-bf7e-8a339b6f2164.html#axzz3xEevmhh8

And I thought they didn't make gurus like that anymore.

India will be one of the fastest growing economies in the world in 2016, with the experts expecting gdp to rise 6%-7%. The vibrancy of the country is illustrated by a recent development.

This morning's FT reports that Indian comedian Kiku Sharda has been jailed for mocking the religious leader of Dera Sacha Sauda, a six million member religious sect. He was arrested from Mumbai by the Haryana Police and booked on December 31 under section 295 A of the Indian Penal Code (outraging religious feelings of any class by insulting its religion or religious belief). (This is a British era law designed to attenuate religious strife.)

The guru, Baba Gurmeet Ram Rahim Singh Insan, is described by the FT as follows: "But the heavy-set, bearded guru is not primarily known for his sober spiritual discourses. Clad in flamboyant outfits evocative of Elvis Presley’s wardrobe in the 1970s, the Baba, who also refers to himself as a saint, has also cut several record albums, including one called “Highway Love Charger”." (Here is a link to the article: http://www.ft.com/cms/s/0/b63e1860-ba00-11e5-a7cc-280dfe875e28.html#ixzz3xDsHBDSS )

The guru's new movie's trailer is well worth a look:

https://youtu.be/scuWiXG5bh8

It hits the theaters in India on the 16 of January but I don't know when it will be released in North America.

Anti-vaccine sentiment in Pakistan Intensifies

The Associated Press has issued the following report:

"QUETTA, Pakistan (AP) — A suicide attack on a polio vaccination center in southwestern Pakistan on Wednesday killed 15 people, mainly policemen gathered to escort health workers, officials said. It was the latest attack on the vaccination campaign and health workers have been repeatedly targeted in recent years by Islamic militants.

The bombing on the outskirts of the city Quetta killed 13 policemen, a soldier and a civilian, said Shahzada Farhat, a police spokesman. He said 23 people were wounded.

"The suicide bomber detonated his explosives among the police officers, said provincial home minister Sarfraz Bugti. "We're in a war zone," he added.

"The bombing happened outside the polio center shortly before vaccination teams were due to be dispatched to local neighborhoods as part of a three-day immunization campaign, said Syed Imtiaz Shah, the local police chief.

"Hours after the attack, Ahmad Marwat, who described himself as a spokesman for Jundullah, or Army of God, a little-known militant group, claimed responsibility for the assault, without explaining why the center was targeted. He warned of more attacks on polio teams in the future.

"Polio workers in Pakistan, and their police escorts, have been targeted in recent years by Islamic militants who accuse them of working as spies for the United States."

Concerns about vaccinations are even stronger in Pakistan than in California.