1 San Francisco Chronicle reporting Warren Buffet could not beat S&P 500 for 2011. Warren Buffett, the billionaire investor who has highlighted his record of beating the market when stocks languish, oversaw a decline last year as the Standard & Poor's 500 index ended essentially unchanged. Buffett's Berkshire Hathaway slipped 4.7% in 2011. It was the second time since 1990 that the firm underperformed an S&P 500 that had either declined for the year or rose less than 5%. Berkshire gained about 17-fold in the 21-year period, while the index has nearly quadrupled. Buffett's personal holdings of Berkshire lost about $2 billion last year. In September, the 81-year-old Buffett initiated the first share-repurchase program in four decades as Berkshire's chief executive officer. On a quarterly average basis, the stock price slipped in the three months that ended Sept. 30 to its lowest level relative to book value in more than 20 years.
2 New York Times on the German president’s controversial call to a newspaper editor. A smouldering political scandal that could harm Chancellor Angela Merkel has flared anew when Germany’s biggest newspaper confirmed that the president, Christian Wulff, had made a menacing telephone call to its editor in an unsuccessful effort to snuff out a damaging news story. Wulff, a key ally of Merkel, left a voicemail message last month on the mobile phone of Kai Diekmann, editor of the newspaper, Bild, in which he spoke of a “war” if the newspaper disclosed an unusual personal loan that Mr. Wulff had received from the family of a German entrepreneur. Bild went ahead anyway, and the resulting scandal quickly consumed the news media and political classes, prompting calls for Wulff’s resignation.
The news of the president’s call to the editor, first reported by two rival German newspapers, Süddeutsche Zeitung and Frankfurter Allgemeine Sonntagszeitung, intensifies the political pressure on Wulff, who is widely judged to have handled the scandal poorly, providing vague and grudging explanations about the loan. The episode has embarrassed Merkel as she seeks to muster political capital to deal with the euro crisis. The post of president is largely ceremonial in Germany, but as head of state, he or she is also seen as the ultimate defender of the Constitution, in which freedom of the press is enshrined.
3 The New York Times on India’s new ultra cheap car. India has a new ultracheap small car. Well, sort of. The company that introduced it on Tuesday, Bajaj Auto, best known for making motorcycles and motorized three-wheeled rickshaws, does not even call its newest product, the RE60, a car. Bajaj prefers the generic term four wheeler. Executives say they have no plans to market it to average consumers. Instead, they are aiming for drivers of rickshaws, which are powered by motorcycle engines and operate as short-distance taxis in India. The company did not say how much the RE60 would cost when it hit showrooms this year. But a rickshaw costs about 120,000 rupees, or $2,200, and one auto analyst estimated that the RE60 would be priced 25% higher than that, or about $2,750. RE60 was widely anticipated as Bajaj’s answer to the Tata Nano. The Nano, which its maker Tata Motors introduced in 2009, was billed as a people’s car that would bring mobility to India’s masses. It sells for a list price of about $2,600. But the analyst, Hormazd Sorabjee, said the RE60 would pose no challenge to the Nano, which itself had attracted only a fraction of the buyers for which Tata had hoped because of production delays and safety concerns. Bajaj said the RE60, fitted with a one-cylinder, 200 cc engine, would deliver 35 kilometers per liter, or 82 miles per gallon, and have a top speed of 70 kilometers per hour, or 43 miles per hour.
4 The Guardian on house prices falling 65% in Iceland. Property prices in Ireland are in freefall, according to housing analysts, whose latest figures show that prices in Dublin have collapsed by 65% in five years and by 60% across the country. "There is no doubt the market is over-correcting," said Marian Finnegan, chief economist at the Sherry FitzGerald Group, with house prices now making it cheaper to buy than to rent. Finnegan said the biggest shock was the level of deflation in Dublin, which "defied logic to a certain extent". The new homes market was now "completely non-functional", she said. The woeful state of the market is in stark contrast to the frenzied buying and selling of the mid-2000s when property in Dublin was achieving higher prices per square metre than Manhattan. One 550 sq metre house called Walford, in the embassy belt of Ballsbridge in Dublin 4, was sold in 2005 for a record price of euro 58m – €23m more than the asking price.
5 The Straits Times on salary cuts for Singapore leaders. The committee to review ministers' salaries has recommended a pay cut of 37% for a minister at entry grade, and a cut of 36% for the prime minister, including the removal of pensions. The government intends to accept the committee's recommendations, the prime minister said in a letter to the committee. That means the salary of a minister at entry level will be cut to $1.1 million. This is down from the current actual salary which stood at $1.58 million in 2010. The prime minister's salary will also be adjusted to $2.2 million, down from the 2010 salary of $3.07 million. The president's annual salary will be cut by 51% to $1.54 million. For the most junior ministers, the starting pay at the entry-level MR4 grade is $935,000. The committee has also recommended that ministers' pensions be done away with. The basis of the pay cuts is a recommendation to change the formula used to peg ministers' salaries to top private sector pay. The current formula for the starting salary of a minister is based on the median income of the top eight earners in six professions, including banking and law, with a one-third discount.
6 The Wall Street Journal report on urban India drowning in its own excreta. If a new report is to be believed, India is swimming in its own sewage and turning its rivers into drains for its ever-expanding cities. The Center for Science and Environment, a 22-year-old New Delhi-based advocacy and research organization, has just released its seventh report—this one entitled, “Excreta Matters: How urban India is soaking up water, polluting rivers and drowning in its own excreta.” The two volume report, which took three and a half years to research and write, includes surveys of water and wastewater management of 71 cities in India, editor Souparno Banerjee said.
“Every city was the same old story—it had devastated its surface water, it was depleting its ground water and it had no plan for managing its water or wastewater,” Banerjee said. As a result of neglect and bad planning, many cities have turned their rivers into drains, and the citizens who live around them no longer remember that they were once pristine sources of water, Banerjee says. The Budha Nullah in Ludhiana was once a darya, or river, says Sunita Narain, the director general of the research and advocacy organization, in the preface to the report. The most damning conclusion Narain’s team reaches about India’s water and wastewater management, is “the complete lack of data, research and understanding on this issue in the country.”
Narain suggests perhaps the ignorance is willful. “Is it a reflection of the caste system of Indian society, where removing waste was someone else’s business? The business was untouchable. Certainly it was unspeakable. Or is it a reflection of the current governance systems, where water and waste are government business and, within that, it is the sole business of a lowly water and sanitation bureaucracy?” “Or is it simply a reflection of Indian society’s extreme arrogance—our belief we can fix it all as and when we get rich?”
7 The Times of India on Indian embassy’s advisory to business houses to avoid doing business in China’s Yiwu city. India on Tuesday reacted sharply at China's failure to provide basic level of protection to a diplomat who was roughed up by hooligans inside a Chinese court and the illegal detention of two Indians by a bunch of local traders. The Indian embassy in China has asked Indian businesses to avoid transaction in the city of Yiwu, regarded as the world's biggest commodities market, after local authorities failed to stop the manhandling of a diplomat S Balachandran and did nothing to free two hostages held for a fortnight by Chinese traders. Indian officials said efforts were on to bring them to Shanghai to ensure their safety.
8 Former federal minister and Jammu & Kashmir governor Jagmohan writing in Deccan Chronicle on India’s darkling plain. The conflicts and controversies over the institution of Lokpal remind me of the lines of poet Mathew Arnold: “And we are here as on a darkling plain/Swept with confused alarms of struggle and flight/Where ignorant armies clash by night.” I wonder whether all the fretting and fuming reflect anything other than the clash of ignorant groups who remain in the dark about the underlying reality of the degraded mindscape of India and its polluted environment.
Beginning from the jeep scandal of 1949, there has been a virtual flood of cases of scams and scandals. The 2G spectrum scam broke all records of malfeasance; the Commonwealth Games, meant to enhance the global standing of the country, left a huge dent in its reputation after consuming about 18,000 crore of the national exchequer; the Bellary mines case has resulted in the swindling of public revenues on a massive scale. Even the statutory institutions, supposed citadels of fairness, such as Public Service Commissions, have fallen prey to corrupt practices. Two chairmen of the commission, one of Punjab and other of Maharashtra, were prosecuted. The Army, too, has not remained untainted. Even the media, the so-called custodian of clean public life, has started the unethical practice of “paid news”. The latest report of the Global Financial Integrity puts the estimates of the Indian wealth stashed abroad at $1.4 trillion.
My own long experience of dealing with political as well as bureaucratic functionaries has reinforced my belief that as long as the Indian mind is not reformed, no administrative, economic or constitutional reforms would save the country from the ever-deepening quagmire of inefficiency, corruption and malpractices. The experience of 65 years of Independence has shown that it is not possible to build a clean and honest system of governance on a diseased mindscape in the degraded milieu which such a mindscape gives rise to.
History tells us that every turning point in the march of civilisation has been preceded by a fundamental change in the mindscape of the people as in the case of the European renaissance in the mid-15th century. It was such inner change that was most needed in the post-1947 India, and it was this very pivotal need that was neglected by the builders of our nation.
9 Business Standard piece on Kerala facing labour shortage despite high wages. At the end of 2011, the minimum daily wage of a skilled worker in Kerala stood at Rs 450, up from Rs 350 in the previous year. This increase is owed to the huge demand-supply gap on various labour fronts, says industry. The daily wage of a mason, who builds the basement of houses and small and medium buildings with rock, edged up to Rs 700 per day. Also, a bus driver now gets Rs 650 and conductors Rs 550-600. The highest statutory wage fixed by the state government is Rs 351.39 for river sand collection and for its loading and unloading. The wage fixed for agricultural labourer is Rs 200. Nationally, this varies from Rs 156 -232 according to the area and is effective from October, 2011.
However, even at this high rate of wage, the state is facing an acute shortage of labour. The average daily wage of an unskilled worker now is Rs 400 and for women workers this is Rs 350. Of late, Kerala is also seeing a good flow of workers, both skilled and unskilled, from states like Orissa, Bihar, Assam, Bengal, Uttar Pradesh, Andhra Pradesh and Tamil Nadu. J Poulose, a construction contractor, gives advance payment to his workers for ensuring regular work at his sites. KU James, a former hotel owner says he has closed down his hotel just because of the labour shortage. “We are ready to give whatever they demand, but we were not getting workers for 2-3 months,” he says.
10 Business Standard on big economies facing $ 7.6trn debt in 2012. Governments of the world’s leading economies have more than $7.6 trillion of debt maturing this year, with most facing a rise in borrowing costs. Led by Japan’s $3 trillion and the US’s $2.8 trillion, the amount coming due for the Group of Seven nations and Brazil, Russia, India and China is up from $7.4 trillion at this time last year, according to data compiled by Bloomberg. Ten-year bond yields will be higher by year-end for at least seven of the countries, forecasts show.
Investors may demand higher compensation to lend to countries that struggle to finance increasing debt burdens as the global economy slows. The International Monetary Fund cut its forecast for growth this year to four per cent from a prior estimate of 4.5% as Europe’s debt crisis spreads, the US struggles to reduce a budget deficit exceeding $1 trillion and China’s property market cools.
11 Mint reporting that India’s port expansion plan is likely to miss target. India is likely to miss the target of increasing the capacity of major ports as the government has awarded only one out of 23 proposed projects, according to two senior shipping ministry officials. The government had identified 23 port projects for the current fiscal year to increase the capacity of ports in India by 236.63 million tonnes (mt) a year with an estimated investment of Rs167bn, according to Maritime Agenda 2010-20, a shipping ministry plan for the development of the maritime sector. The country’s major ports play a key role in facilitating external trade, which accounts for 40% of India’s gross domestic product (GDP).
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