Sense, Sensex and Sentiments :Book Review

The book should be read by all patriotic Indians as it educates us on the apathy of the government to prevent the loot of the country.

The book Sense, Sensex and Sentiments written by M R Venkatesh, an experienced chartered accountant, describes the ways corruption is practiced in India with illicit outflow of domestic capital.

 As per John Christensen, an authority on secrecy jurisdictions, who has written the foreword of the book, India ranks fifth in the world, in terms of the scale of its illicit outflows, and between USD 22-27 billion of domestic capital flows illegally out of India every year. With the increase in corruption levels in the country in the last few years, scams hitting the headlines every day, and the government remaining a silent spectator, the book is very timely and educative for all.

 As the author has pointed out, corruption is the manifestation of poor governance and results in the flight of capital from an economy. Capital flight causes poverty, which in turn feeds on terror. Terror leads to chaos, crisis and calamity and in this situation, the corrupt, criminals and terrorists flourish.

As an accountant of great experience, the author has shared details of hawala, money laundering and tax havens. While there are no official estimates of the amount of illegal wealth parked in tax havens abroad, as per the most conservative estimate, USD500 billion is parked in tax havens. Information about 1000s of Swiss bank customers from about 180 nations is available, which is now in the possession of the French government. Spain, Italy and Germany have obtained their share of the data, but there is no mention about India showing any interest in this matter.

 The book has touched upon important aspects of market sentiments, the role of the media in the swings and its effect on the stock market. The investment by the financial sector into the commodities and futures market is affecting food prices, irrespective of the demand-supply relationship.

Today, as we witness an abnormal rise invegetable prices and the government’s helplessness to control the rise, the discussion in the book on this aspect is pertinent. The media plays a very important role in influencing the psyche of the people. As such, the role of the financial players in influencing the views of the media also needs to be looked at. The arrangement between the media and financial players through ‘treaties’, affects the media’s role as an independent commentator. (more…)

Trading markets without knowledge

knowledge1Trading without adequate knowledge of the markets and self is foolish because by doing so you are gambling. There are traders that subconsciously want to lose money. I used to be that way, I think. I believe that my problem was I didn’t do much research or preparation. So essentially deep down I didn’t feel I deserved the money. There is a certain amount of self-knowledge needed to choose the proper trading method. It has even been suggested that many small traders in the futures market, without knowing it, secretly want to lose. They jump in with high hopes – but feeling vaguely guilty. Guilty over ‘gambling’ with the family’s money, guilty over trying to get ’something for nothing,’ or guilty over plunging in without really having done much research or analysis. Then they punish themselves, for these or other sins, by selling out, demoralized, at a loss.

Damn Algorithms

What more is left to say at this point other than the fact that the hedge fund computers and their damnable algorithms have destroyed the integrity of the US futures markets. The sheer size, extent, ferocity and volatility of the moves that these pestilential computers are creating have rendered these markets basically useless for what they originally came into being for, namely, risk management for commercial entities.

—I am predicting here and now that unless something is done to corral these hedge funds, the futures market is going to become useless as a risk management tool for non-speculative entities.

—Maybe we all should just go the hell to sleep and wake up in a year and see if the chart has actually gone anywhere besides up and down like a stinking yo-yo.

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