Bitcoin– Not a Short Term Investment

crashing bitcoin.jpg


Sipping coffee with one of my nephews in Delhi who visited my office to counsel his brother in law on the nitty-gritty of Home Loan financing I was shocked to hear a query from a semi-illiterate middle-aged visitor.  ” Is it safe to invest in etherium and which company is good for investing Etherium”  With banking background for more than 35 years and managing a Finance company after my retirement,I have just acquired a little knowledge about the cryptocurrency from my son in law who has mastered the complete theory of blockchain and its products during my recent visit to the USA. The subject looked interesting and on my way back from the USA, I managed to read two books on the subject which enlightened me further.

Finishing my cup of coffee, I looked amazingly at the visitor to know how he knew about Cryptocurrencies. Baffled by my direct query, he thought for a while and came up with another bombshell   ” Perhaps you have not heard of Etherium so far. My son has invested Rs.500000/- and every day 10 etherium are credited to his account which he can encash after 15 days”

I could sense trouble for him and the family for having invested such a big amount without knowing about the product. On further investigation, I could google the name of the company which turned out to be a P2P Finance company misleading the poor investors.

This incident reminded me of the Harshad Mehta’s infamous regime when thousands of investors had lost their hard earned money by investing in non-existent companies. Every day the stocks were gaining new heights and more and more unsuspected public was getting attracted to the stock market. We could see application forms for IPO’s at the shops of tea vendors, Pan wallah, taxi driver and other such small shops.

Everyone was found discussing about the share market and trying to get rich overnight by investing in share market. Alas!! most of the investors lost their hard earned and sometimes borrowed money also.

I don’t think investment in Bitcoin or other currencies is going to behave the same way as the markets did during Harshad Mehta’s regime but my worries originate from the conversations I have started hearing in India and now Australia. People doing petty jobs and small shopkeepers, barbers have started discussing cryptocurrencies. Nothing technical but worried exclamations “Bitcoin is moving up, Ripple(XRP) is down, Etherium is inert, Ohh- I lost 1000$”

sentiments are also hurt due to daily reports of employees arrested by the enforcement agencies of various countries for mining cryptocurrencies in their office unauthorisedly using the infrastructure provided to them by the departments for carrying out official work. An advanced computer with a specific configuration is required for mining of crypto which consumes a lot of electricity causing loss to the department. The cost of mining goes astronomically high for mining on ordinary computers which forces the employees to use unfair means.

Now Google coming heavily by banning all ads pertaining to ICO and other related issues, the crypto has nosedived again and the short term investors or traders are jumping in to sell their holdings. This will again impact the valuation and a lifetime chance for long-term investors who could analyze the newly found internet product intelligently.

We know Bitcoin has already produced hundreds of Millionaires and who knows which of the more than 1400 cryptocurrencies takes a few more to this mark in near future






With millions of dollars being lost by the investors in hacking incidents rather than actual turbulence in prices due to unexplained reasons, the trading in this newly found currency has been facing uncertain future. The exchanges are going bankrupt and creating doubts in the minds of investors about the safety of their accounts. There is nothing of the sort who can be approached in an emergency as the entire system is digital and investor has only one key to control his wallet.

There are no regulators as the block-chain is meant to be transacting business without any third party interference to maintain privacy about the transactions which doesn’t cost much too.

Australia and Japan have allowed various exchanges to transact business through BITCOIN but making it mandatory to ensure compliance with AML and KYC norms. The basic purpose seems to control anti-terrorist activities by not allowing money to flow the unintended destinations.

Other countries like China, North Korea, and Russia have their own definitions and interpretations of the cryptocurrency but the Indian Govt has clearly stated BITCOIN to be an illegal entity. However, the blockchain technology remains opened to improve the efficiency and cost of the transactions in India.

Bitcoin-like cryptocurrencies can be regulated by the U.S. Commodity Futures Trading Commission (CFTC), U.S. District Judge Jack Weinstein ruled recently in his judgment. The federal judge thus upheld the CFTC’s position from 2015 that cryptocurrencies are commodities, saying it was supported by the plain meaning of the word “commodity” and that the agency had “broad leeway to interpret the law” regulating commodities.

Now coming to the ruling by the US Courts, if the bitcoin is treated as a commodity, the same will be regulated under SEC and CFTC, the regulators defeating the very purpose of creating BITCOIN by Satoshi Nakamoto. Will this commodity be as acceptable as has been so far giving the valuation to BITCOIN as high as 18000 US$? I have my own exceptions here! Although the total supply is fixed at 21 million and the last lot of bitcoins is destined to be mined in the year as far as 2146  but the system getting more and more transparent through regulators, the demand of BITCOIN may subside bringing Bitcoin to the sensible tradeable levels

The only good news is coming from the USA with a billion dollars hedge fund floated to rope in long terms investors in the cryptocurrencies and that makes sense too as short-term investors/traders are just scaring away with the present valuation of almost all the cryptocurrencies. Another credit card comapny has come up with cash back scheme in cryptocurrencies. This may boost the comfort level of people who are watching the movements of these currencies from a distance.




Banks Are Failing Again in America

 It doesn’t mean the broader economy is in trouble.

Back in India We have been watching turbulence in Banking Industry due to the mounting NPA’s every year causing erosion in the soundness of health of the entire banking system. The capital adequacy ratio has declined considerably. Gross NPA’s are nearing 10 lakh crores and banks are turning red due to huge provisioning stipulated by RBI.

Insolvency and Bankruptcy code promulgated by the Parliament has remained ineffective so far as none of the 12 big accounts has shown any sign of recovery and   Rs.1.75 lakh cr outstanding in these accounts from these 12 accounts remains stuck due to various loop holes in the system

The distressed assets situation in India has worsened over the last few years, with banks’ NPA levels at an all-time high. The extent of NPAs in the system is worse than those seen in Italy, Greece, and Portugal at the height of the global financial crisis of 2008-10. The annualised growth rate of NPAs over the last five years has been more than 25 percent. NPAs have been mostly concentrated in the public-sector banks. The acute stress in the public-sector banks is due to a combination of external factors, such as problems related to infrastructure projects and the global slowdown in commodity prices, and internal, such as risk mismanagement and excessive growth in lending books.

This growing stock of non-performing assets has adversely impacted the growth, profitability, and capital adequacy levels of the public-sector banks. They account for more than two-thirds of the banking sector, so their stress levels now jeopardise credit growth, which recorded its lowest levels in over 60 years in the 2017 fiscal year. India continues to be an asset-poor country, with a loan-to-GDP ratio of 52 percent, compared to 152 percent in China, 151 percent in Thailand, 134 percent in the United Kingdom, and 189 percent in the United States. While much of the impact can be attributed to a slowdown in corporate credit demand, the public-sector banks’ lower capital adequacy levels are restricting their lending capacity, reducing their lending to the retail and SME segments.

Despite all symptoms of serious illness, the state owned Banks in India manage to survive due to various constraints compelling the Government to resort to dripping through recapitalization

but banks are failing again in America.


The past several years have been relatively placid for the banking industry. After the wholesale failure of the system during the financial crisis, banks gradually recovered their footing. Aided by essentially free money from the Federal Reserve, bailouts, and widespread federal and central bank guarantees, banks once again became rock-solid American institutions. As the expansion rolled on, companies and individuals did a much better job keeping up with their financial obligations. The result: record profits for banks and an extremely low rate of bank failure.


In 2016, banks covered by the Federal Deposit Insurance Corporation showed huge profits and only a few banks failed last year. What’s more, the banks that failed were truly marginal, counting just 18 branches


But something worrisome is happening in 2017. So far this year, seven banks have already failed. More important, the banks that are failing are significantly larger.  Guaranty Bank of Milwaukee bit the dust. A few months before, it was First NBC Bank of New Orleans Financial failure begets financial failure. For the first time in nearly a decade, this is what it has  started to happen in US.


The U.S. economy is, by most accounts, rolling along. The current expansion is now in its 95th month. The economy has added payroll jobs for a record 79 months, and the unemployment rate is at 4.4 percent.

When expansions get longer, a few things happen. Banks, consumers, and companies all get more confident about their ability to handle debt, which leads to more credit being extended. At the same time, lenders seeking growth start to become more aggressive about putting money in the hands of people. Once all the people who can easily afford to purchase cars have taken car loans or mortgages, banks seek out more marginal borrowers in order to keep boosting their profits. And once credit gets distributed a little too widely, borrowers begin to default—even if nothing else changes in the economy or the climate for credit.


But something is changing. For the first time in a decade, the Federal Reserve is raising interest rates—thus increasing the cost of borrowing and servicing debt. Before December 2015, when the Fed boosted the federal funds rate from zero to 0.25 percent, it had been 9.5 years since the Fed last raised the interest rates it controls. The Federal Reserve  has since raised rates in 0.25 percent increments twice. Yes, interest rates are still remarkably low, and the moves have been small. But it’s the direction that matters. For a decade, people in the economy had been conditioned to think that interest rates don’t really go up—and they borrowed and planned accordingly.

When interest rates were low and generally declining, people could refinance their way out of trouble. But when interest rates go up, it becomes harder to avoid trouble. And so as rates rise this deep in an economic cycle, it’s not surprising that the rate of financial failures is increasing. After hitting the lowest level since 2006 in the third quarter of 2016, mortgage delinquency rates rose in the fourth quarter to 4.8 percent. The delinquency rate on credit card loans, while still at a very low level, rose for three straight quarters in 2016. The volume of auto loans that are delinquent is rising rapidly. All these metrics will likely continue to rise.

In addition, it’s worth recalling that this recovery has been remarkably uneven. Amid the long expansions, there are always pockets of distress. So if you’ve extended credit aggressively in an area that is struggling to begin with, and interest rates start to rise, you’re likely to run into trouble quickly. Guaranty Bank, which failed in early May, lends primarily to lower- and middle-income people in urban areas, a demographic slice that hasn’t fully participated in the expansion. New Orleans’ First NBC Bank, the biggest failure so far this year, is a relatively new bank (founded 2006) that lent heavily to the oil and gas industry, which has been traumatized by persistently low prices.

None of this is to say we’re going to have a repeat of the financial crisis or there is  any danger of a recession but the spate of failures should set off alarms. The forces that have helped turn the direction of delinquency rates around are still very much there. The business cycle continues to age, What’s more, a sudden increase in financial failures tends to push banks and other lenders to pull back credit and tighten lending terms—which means it will be harder for people to refinance their way out of trouble or ask for leniency.

The two biggest democracies have different perceptions and strengths to tackle the problem of growing NPA and sick financial institutions but we have seldom heard of failure of Banks in India that credits the US with more transparency and freedom for the institutions to decide future of their own. Yes the Indian system remains protective under the bigg Government umbrella


The “I don’t care” attitude of Indian universities is keeping them off global rankings — Quartz

The Times Higher Education’s (THE) World Reputation Rankings for universities are out. And Indian educational institutions are nowhere in the top tier of the list. One of the world’s most prestigious rankings, THE as usual had a large number of institutions from the US and UK, including the three-century-old Harvard University and the Massachusetts Institute…

via The “I don’t care” attitude of Indian universities is keeping them off global rankings — Quartz

Unending Wait





my lov for that gal, cute smiling and tall,

blonde hair aesthetic walk n a dovy eye ball,

the chirpy stylish talk n her visibility online,

muscial hearty laughs n the air refrshing fine

A slight tender glance down her majestic stride,

Her redolent gyrations  leaving me always wide eyed,

captivated  and thrilled , by her charm like a prose

lost all credence for walking  up to her and propose,

Alas! one day she disappeared never to return

leaving me lost, bewildered dousing my heart burn




Bitcoin is approaching new highs for the year because of India’s demonetization

India’s cash crunch is sending one currency soaring. Since prime minister Narendra Modi pulled Rs500 and Rs1000 notes from circulation on Nov. 8 in a bid to fight corruption and terrorism, the weekly volume of bitcoin trading in India has nearly doubled from prior levels. The increased trading has helped push the digital currency’s value…

via Bitcoin is approaching new highs for the year because of India’s demonetization — Quartz