We have a special treat today. Gordon DSouza has shared his deck presented at the IIF Meet in Mumbai
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Some stuff I am reading today morning:
Research:GDP growth will decelerate to 3.5% (Ambit)
Demonetisation is like a speeding car hitting a wall (Kenneth Andrade)
FPI outflows hit $3 Billion in Nov (BL)
Promoter share pledges continue to remain high (Mint)
Peer-Peer Lending Options in India (Be Money Aware)
The Emerging Markets’ Dollar Problem (Bloomberg)
Income Tax Department tightens the screws (FE)
Sustainable sources of competitive advantage (Morgan Housel)
Tatas as a cautionary tale (Aswath Damodaran)
A lesson from the market’s over reaction (PragCap)
Some off beat reads for the weekend:
Why Modi has already won the demonetization gamble (Manu Joseph)
Being Cyrus Mistry (Ashwin Sanghi)
How Trump took Middle America (Guardian)
China’s great leap backward (Atlantic)
Rodrigo Duterte’s bloody war on drugs (New Yorker)
With the Kurdish Peshmerga on the road to Mosul (NYTimes)
More people die in India taking selfies than anywhere else (WP)
Why Catholic Churches have secret astronomical features (Longreads)
Sanjan Day-The Day Parsis escaped Islamists (MyInd)
Obituary:Lt.General S K Sinha (IE)
Travelogue:Dalmatian Coast,Croatia (TeamBHP)
Gossip: Brinda Karat next CPI (M) Chief (Gossip Guru)
On the Kohinoor Diamond (William Dalrymple)
6 Signs to recognize a Psychopath (Curejoy)
7 YouTube stars who became millionaires (YS)
In pre-election speeches in Goa and Karnataka, Modi said that demonetisation was not the last bow in his quiver. “I have more projects in mind to make India corruption-free. …We will take action against ‘benami’ property. This is major step to eradicate corruption and black money”
With the passing of the Benami Transactions (Prohibition) Amendment Act, 2016, Modi now has the statutory powers to go after property crooks, most of whom are either politicians or realtors connected to politicians. The law is draconian and it can be used to confiscate benami properties. Demonetised money can be laundered sometimes, but confiscated property is gone forever.
Under the law, once the government sets the process in motion, an initiating officer will serve a notice on the benamidaar and take the property under his control. An adjudicating officer will then examine all documents and evidence and pass an order on whether to confiscate the property. Once the property is confiscated, it will be managed by an administrator till a further course of action is prescribed against the offender. What will further strike fear in the minds of beneficial owners and benamidaars is the provision of a jail term and massive fine if found guilty. The amended Act provides for prison terms of up to seven years and fines of up to 25 per cent of the fair market value of the confiscated property.
If the law is used to go after many high-profile benamidaars, the property market will crash. That will bring its own deflationary trends and possibly lead to a systemic crisis, for the real estate industry has deep linkages with the real economy, the asset markets and the financial system.-wrote Jaggi