IMF chief warns of fresh financial crisis; Sliding tech stocks could signal blip or bubble; Why dynasties dominate India politics

1 IMF chief warns of fresh financial crisis (Phillip Inman in The Guardian) George Osborne is to tell an audience of free-market campaigners in Washington that the UK's economic turnaround will defy those who say austerity and low wage growth will lead to long-term stagnation. The chancellor will attempt to demolish claims that a further five years of austerity will restrict growth and hurt workers' living standards. Osborne will argue that low interest rates, the Bank of England's creation of new money through massive bond purchases under its quantitative easing programme and a strengthened banking sector can secure a bright future for the UK.

Osborne's speech comes after head of the International Monetary Fund, Christine Lagarde, issued a warning to world leaders that they need to do more to deal with huge government and bank debts that she said continue to drag down growth and undermine the stability of the financial system. Lagarde said leaders needed to co-operate in their efforts to repair public sector and bank finances to protect against a repeat of the 2008 crash.

Lagarde's warnings against complacency echoed an IMF report earlier in the week that chastised Brussels for failing to put in place a financial lifeboat capable of rescuing more than a few small banks. The financial stability report also highlighted concerns at the rise of risky investments in the US and difficulties faced by emerging economies destabilised by huge outflows of funds. Low inflation in the eurozone was also a concern, especially as it could herald a downward spiral of low growth and declining real wages.

The IMF wants to encourage policymakers in Europe, the US and Japan to consider deeper reforms to their labour markets and regulations that restrict trade. The broadly free-market agenda is designed to open up markets, spur growth, which in turn will generate jobs. While the UK and the US have forced their banks to bolster bank balance sheets and put in place mechanisms to deal with institutions that fail, the eurozone is lagging.

http://www.theguardian.com/world/2014/apr/10/christine-lagarde-imf-warns-new-crash

2 Sliding tech stocks could signal blip or bubble (Benny Evangelista in San Francisco Chronicle) A month-long slide in Internet and biotech stock prices could be just a correction. Or, in one analyst's view, Wall Street is about to be overturned like a Smart car in San Francisco. "You have a stock market that's insanely priced, that's the problem," said Fred Hickey, editor of the monthly High-Tech Strategist investment newsletter. "What we saw in the last couple of weeks is a warning sign for the rest of the market. Get out, while you have a chance."

Hickey speculates the rising income gap between rich and poor contributed to vandals overturning Smart cars this week. "They're flipping cars in San Francisco," Hickey said. "The average American is not doing well." Internet and biotech companies' stocks have fallen by more than 20 percent since early March after a bullish run-up that started last year. The drop caused analysts like Hickey to wonder if the market will soon suffer its third bubble burst since 2000.

"Like I said in 2000 and I said in 2007, you're going to have a problem," Hickey said. "So how it all plays out, I don't know. I just know ... it's going to end somehow in a terrible depression." However, some observers say the recent slide is nothing more than a blip.

Analysts said investors were selling out of growth stocks - higher-risk, but with greater future rewards - and moving their funds to companies with more tangible profits. Biotech stocks have declined partly because of concerns about Gilead Sciences, the Foster City pharmaceutical company that recently received federal approval to sell an expensive blockbuster hepatitis C drug, Sovaldi. Overall, investors fear the rising prices of new therapies are unsustainable. 

In addition, 29 life-science companies went public in the first quarter and raised more than $2 billion - a gold rush that fueled speculation of a bubble. But Hickey of High-Tech Strategist said other factors that are similar to the previous two market busts point to a more serious problem ahead.  Those include a rush of new IPOs from companies that are not yet profitable and continuing unemployment problems. He also criticized the government's economic policies. "This is the worst recovery in history," Hickey said. 

http://www.sfgate.com/news/article/Sliding-tech-stocks-A-blip-or-a-bursting-bubble-5390505.php?cmpid=hp-hc-bustech

3 Why dynasties dominate India politics (Sanjoy Majumder on BBC) For most of its independence, India's politics has been dominated by the Nehru-Gandhi dynasty. Rahul Gandhi, from the fourth generation of that family, now leads the Congress party. Despite being a flourishing democracy for more than six decades, Indian politics is still very much a family business.

Jyotiraditya Scindia, a minister in India's Congress government is also a member of one of the country's best-known aristocratic families from Madhya Pradesh. The Scindias ruled their area for more than 300 years. That, and the fact that the local parliamentary seat has voted in favour of Mr Scindia's father and grandmother in the past, makes him a clear favourite.

"My legacy is something I am proud of," he admits. "But I'm a product of 21st Century India. I believe that it's your work and your track record that matters." Mr Scindia is a rising Congress party star but for many here it's his past, not the future, that matters. "For us he is and will always remain our king," one old villager says as others nod in approval.

India's not new to political dynasties, the most influential one being the Nehru-Gandhi dynasty of the Congress Party. "We are essentially a feudal culture," says political commentator Manini Chatterjee. More than a third of the members of the outgoing parliament belong to political families and the trend is clearly spreading.

In the eastern state of Bihar, one of India's poorest, a new political dynasty is on the rise. Laloo Yadav, a powerful regional politician and a champion of the lower castes, is fielding his daughter Misa Bharti in these elections. His wife, Rabri Devi, is contesting from another constituency. Party workers say the only reason his son is not running for office is because he is underage. In a few weeks, India's newly-elected MPs will enter parliament. But will they be truly representative of the world's largest democracy, or simply resemble a privileged club whose entry is determined by birth?

http://www.bbc.com/news/world-asia-india-26952604