Iran and West agree Nucleur Deal , Sanctions to be lifted

After months of negotiations, Iran and key world powers have agreed on the framework of a landmark deal that is aimed at addressing Western concerns about Tehran’s nuclear programme.

The “Joint Comprehensive Plan of Action” – described by US President Barack Obama as a “good deal” that meets core objectives – is aimed at getting Iran to reduce its stockpile of low-enriched uranium by 98% and scale back the number of installed centrifuges.

In exchange, the US and the European Union will lift sanctions that have crippled Iran’s economy for decades.

Iran’s “breakout timeline”, the time it would take for the country to acquire enough fissile material for a weapon, is currently assessed to be two to three months. Under the framework, this will be extended to at least one year for a period of at least 10 years.

Some of the key parameters of the deal, which has to be finalised by June 30, are given below:

Enrichment

Iran's enrichment capacity, enrichment level and stockpile will be limited for specified durations, and there will be no enrichment facility other than the one at Natanz. Iran's research and development on centrifuges will be carried out at a level and schedule that has been mutually agreed.

A US fact sheet said Iran had agreed to reduce by approximately two-thirds its installed centrifuges, going from 19,000 installed centrifuges to 6,104, with only 5,060 of these enriching uranium for 10 years.

The US also said Iran had agreed to not enrich uranium over 3.67% for at least 15 years and that Tehran would reduce its current stockpile of 10,000 kg of low-enriched uranium to 300 kg of 3.67% LEU for 15 years.

Excess centrifuges and enrichment equipment will be placed in IAEA-monitored storage and be used only as replacements.

The underground enrichment facility at Fordow, near the city of Qom, will be converted so that it is no longer used to enrich uranium for at least 15 years. The facility will be used for peaceful purposes as a nuclear, physics, technology and research center and there will be no fissile material at Fordow.

Iran will not use its advanced centrifuges, such as the IR-2, IR-4, IR-5, IR-6, or IR-8 models, to produce enriched uranium for at least 10 years. Iran will only engage in limited research and development with these advanced centrifuges.

Inspections and transparency

The IAEA will have regular access to all of Iran’s nuclear facilities, including the enrichment facilities at Natanz and Fordow, and with the use of modern monitoring technologies.

IAEA inspectors will have access to the supply chain for Iran’s nuclear programme and monitor materials and components to prevent diversion to a secret programme.

They will also have access to uranium mines and surveillance at uranium mills where Iran produces yellowcake, a type of uranium concentrate powder, for 25 years.

A dedicated procurement channel for Iran’s nuclear programme will be established to monitor and approve, on a case by case basis, the supply, sale, or transfer to Iran of nuclear-related and dual use materials and technology.

Iran has agreed to implement the Additional Protocol of the IAEA, providing the IAEA greater access and information regarding its nuclear programme, including both declared and undeclared facilities.

Iran will implement an agreed set of measures to address IAEA’s concerns about the “Possible Military Dimensions” of its nuclear programme.

Reactors and reprocessing

According to the US, Iran agreed to redesign and rebuild a heavy water research reactor in Arak, based on a design that is agreed to by Western powers, so that it will not produce weapons-grade plutonium and support only peaceful research.

The reactor’s original core, which would have enabled production of significant quantities of weapons-grade plutonium, will be destroyed or removed from Iran.

The US also said Iran had “committed indefinitely to not conduct reprocessing or reprocessing research and development on spent nuclear fuel”.

Sanctions

The US has said Iran will receive “sanctions relief if it verifiably abides by its commitments”. The US added: “Important implementation details are still subject to negotiation, and nothing is agreed until everything is agreed.”

Nuclear-related sanctions of the US and EU will be suspended after the IAEA has verified that Iran has taken all the key nuclear-related steps. “If at any time Iran fails to fulfill its commitments, these sanctions will snap back into place,” the US said.

But US sanctions on Iran for terrorism, rights abuses and ballistic missiles will remain in place.

All past UN Security Council resolutions on the Iran nuclear issue will be lifted once Tehran acts to address key concerns on enrichment, transparency, the Fordow and Arak facilities and Possible Military Dimensions of its nuclear programme.

However, Iran’s foreign minister Mohammad Javad Zarif, without naming the US, described the fact on the framework as “spin”.

“The solutions are good for all, as they stand,” he tweeted. “There is no need to spin using ‘fact sheets’ so early on.”

Though Zarif did not refer to the US by name, no other member of the P5+1 negotiating group, which comprises the US, Britain, France, Russia, China and Germany, had issued a similar fact sheet

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Douglas MacArthur

Douglas MacArthur (26 January 1880 – 5 April 1964) was an American five-star general and Field Marshal of the Philippine Army. He was Chief of Staff of the United States Army during the 1930s and played a prominent role in the Pacific theater during World War II. He received the Medal of Honor for his service in the Philippines Campaign, which made him and his father Arthur MacArthur, Jr., the first father and son to be awarded the medal. He was one of only five men ever to rise to the rank of General of the Army in the US Army, and the only man ever to become a field marshal in the Philippine Army.

On 29 August 1945, MacArthur was ordered to exercise authority through the Japanese government machinery, including the Emperor Hirohito. MacArthur's headquarters was located in the Dai Ichi Life Insurance Building in Tokyo. As Supreme Commander for the Allied Powers (SCAP) in Japan, MacArthur and his staff helped Japan rebuild itself, institute democratic government, and chart a new course that ultimately made Japan one of the world's leading industrial powers. The U.S. was firmly in control of Japan to oversee its reconstruction, and MacArthur was effectively the interim leader of Japan from 1945 until 1948. In 1946, MacArthur's staff drafted a new constitution that renounced war and stripped the Emperor of his military authority. The constitution—which became effective on 3 May 1947—instituted a parliamentary system of government, under which the Emperor acted only on the advice of his ministers. It included the famous Article 9, which outlawed belligerency as an instrument of state policy and the maintenance of a standing army. The constitution also enfranchised women, guaranteed fundamental human rights, outlawed racial discrimination, strengthened the powers of Parliament and the Cabinet, and decentralized the police and local government.

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What is Neoliberalism?

Neoliberalism is the resurgence of ideas associated with laissez-faire economic liberalism beginning in the 1970s and 1980s, whose advocates support extensive economic liberalization, free trade, and reductions in government spending in order to enhance the role of the private sector in the economy.

The usage and definition of the term have changed over time.
Originally neoliberalism was an economic philosophy that emerged among European liberal scholars in the 1930s attempting to trace a so-called ‘Third’ or ‘Middle Way’ between the conflicting philosophies of classical liberalism andcollectivist central planning. The impetus for this development arose from a desire to avoid repeating the economic failures of the early 1930s, which were mostly blamed on the economic policy of classical liberalism. In the decades that followed, neoliberal theory tended to be at variance with the more laissez-faire doctrine of classical liberalism and promoted instead a market economy under the guidance and rules of a strong state, a model which came to be known as the social market economy.

In the 1960s, usage of the term "neoliberal" heavily declined. When the term was reintroduced in the 1980s in connection with Augusto Pinochet’s economic reforms in Chile, the usage of the term had shifted. It had not only become a term with negative connotations employed principally by critics of market reform, but it also had shifted in meaning from a moderate form of liberalism to a more radical and laissez-faire capitalist set of ideas. Scholars now tended to associate it with the theories of economists Friedrich Hayek and Milton Friedman. Once the new meaning of neoliberalism was established as a common usage among Spanish-speaking scholars, it diffused directly into the English-language study of political economy.

Neoliberalism also represents a set of ideas that are famously associated with the economic policies introduced by Margaret Thatcher in the United Kingdom and Ronald Reagan in the United States.
Today the term neoliberalism is mostly used pejoratively as a general condemnation of economic liberalization policies, such as privatization, open markets, and deregulation. The transition of consensus towards neoliberal policies, and the acceptance of neoliberal economic theories in the 1970s is seen by some academics as the root of financializationwith the Financial crisis of 2007–08 claimed to be one of the ultimate results

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ECB opposes furthur bailout but Greece has other plans

Greek Finance Minister Yanis Varoufakis heads to Frankfurt Wednesday for talks with European Central Bank officials as he seeks to build support for a renegotiation of Athens`s 240 billion euro ($270 billion) bailout.

The visit is the latest stop on a diplomatic charm offensive that has seen Varoufakis take his case to London and Rome and comes as Prime Minister Alexis Tsipras visits Brussels to put the plan to European Commission president Jean-Claude Juncker.

Varoufakis`s visit to Frankfurt is seen as especially important as the ECB is reported to be opposed to a pivotal part of his plan: a request for bridging finance needed to keep Greece solvent until June.

According to the Financial Times, the ECB`s opposition could lead to Athens running out of cash at the end of February -- a suggestion that may spook the markets.

In its Wednesday edition, the FT cited officials involved in deliberations as saying the ECB will refuse Varoufakis`s suggestion of raising 10 billion euros in short-term Treasury bills because it refuses to raise an existing cap of 15 billion euros on such debt issuance to 25 billion.

The Greek minister will have another tricky encounter on Thursday, when he meets German counterpart Wolfgang Schaeuble in Berlin in what will be a key test of whether his proposals have any chance of being accepted by the EU`s leading powers.

The challenge he faces in Frankfurt stands in stark contrast to his visit to Rome on Tuesday, where Athens` debt plan was welcomed by Italian Prime Minister Matteo Renzi, sparking a rally on international markets.

Renzi told his Greek counterpart Tsipras, who was accompanying Varoufakis, he believed an accord on the debt terms was possible, and promised the visiting leader of Italy`s support in trying to achieve it.

"There has to be change in Europe," Tsipras said. "We have to put social cohesion and growth before the policies of poverty and insecurity."

Renzi echoed the call for more growth-orientated policies but pointedly steered clear of any comment on the detail of Greece`s proposals, which he said would be discussed by EU leaders next week.

"The world is calling on Europe to invest in growth, not austerity," Renzi said, before joking that the election of Tsipras was a "blessing" because it ensured he was no longer Europe`s number one "dangerous lefty".Varoufakis, the Greek finance minister, is pushing the idea of debt swaps that would avoid the need for creditors to accept `haircuts` on the country`s 315-billion-euro foreign debt, while easing the monthly financing burden on the Athens government.

He said Greece`s ideas would be put to eurozone finance ministers next week ahead of the summit of EU leaders.

The Greek initiative was interpreted by markets as reducing the likelihood of any unilateral debt cancellation, which would entail a risk of reigniting the kind of financial turmoil that has severely damaged leading economies since 2007.

Led by the Athens bourse, which closed up more than 11 percent, stock markets across Europe rose on the news, as did Wall Street and Asia in turn, while the euro was sharply higher.

"After a week of trading insults and threats it looks like the eurozone paymasters and the new Greek government are finally ready to compromise," said Kathleen Brooks, research director at trading site Forex.com.

The Greek government denied the debt swaps proposal represented a climbdown from election promises to force a renegotiation of its debt terms.

German Chancellor Angela Merkel was non-committal about the Greek proposals. "It is clear the Greek government is still establishing its position," she said. "We await their proposals and there will be time enough to discuss them."

Privately, German officials said there was "little room for manoeuvre" on the debt conditions.

Greece`s debt is worth 1.75 times the country`s entire annual economic output. Because of severe spending cuts, the government now raises substantially more in taxes than it pays to fund services, but that surplus is more than wiped out by the cost of servicing the debt.

US President Barack Obama on Sunday appeared to side with Greece by warning of the dangers of "squeezing" an economy in the grip of recession.

Tsipras has dismissed the "troika" system monitoring Greece`s economy -- the International Monetary Fund, European Commission and ECB -- as lacking legal status.

But he also says Greece has no intention of not meeting its outstanding obligations to the bailout creditors.

After visiting Brussels on Wednesday, Tsipras will visit Paris in search of support from France, the eurozone`s second-biggest economy and, like Italy, a critic of EU "austerity".

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India Inc planning to raise funds through ETF

India plans to raise 50 billion rupees ($809 million) by selling additional units of a fund made up of shares in public sector companies, a source involved in the discussions told Reuters, a move which would boost government efforts to trim its deficit.
The previous government had set up the exchange traded fund (ETF) last year as a way of selling shares in 10 state-owned companies. It raised 30 billion rupees in an oversubscribed offering as investors welcomed access to a basket of firms.
The government of Prime Minister Narendra Modi, elected last May, hopes to again tap appetite for a fund that has outperformed the Indian market, already one of Asia's strongest performers.
Goldman Sachs, which is the asset manager of the fund, is set to issue the new ETF units before the end of the fiscal year on March 31, the source said.
"We have the finance ministry's go-ahead and are working out the final details," the source, who is directly involved in proceedings said. The source cannot be named as discussions are confidential.
The government has set a target of $10 billion to be raised by selling government-held shares, in order to trim the fiscal deficit to a seven-year low by the end of March.
Expanding the Central Public Sector Enterprise (CPSE) ETF would be a welcome lift.
The ETF comprises 10 stocks, mixing heavyweights such as Coal India Ltd and Oil & Natural Gas Corporation Ltd with laggards such as Bharat Electronics Ltd and Engineers India Ltd.
The unit value of the fund has increased 38.8 percent since its launch last March, outperforming a strong 30.6 percent rise in the NSE index during the same period.
To date, the current government has raised $3.9 billion of its $10 billion target, most of it coming from last week's record offering of a 10 percent equity stake in state-run Coal India.
However, plans for a second exchange traded fund announced last year have been put on hold, the source added. The fund was to have been made up of government-held minority shares in non-state firms including ITC, Larsen & Toubro and Axis Bank.
Finance ministry officials declined to comment but said that the government was considering all options to meet its target.
"We are working on many issues," Aradhana Johri, secretary in-charge of the government's disinvestment programme, had said on Friday after the sale of Coal India shares.
A Goldman Sachs spokesman declined to comment. ICICI Securities was not immediately available for comment.
($1 = 61.7849 rupees)

A "breakthrough understanding" to open India's nuclear power sector to U.S. firms reached during President Barack Obama's visit to New Delhi last month could be finalised this year, Indian officials say.
The Jan. 25 announcement by Obama and Prime Minister Narendra Modi followed six weeks of intensive talks, but few details were released beyond a framework based on India's acceptance of the principle that plant operators should bear primary liability in the event of a nuclear disaster.
Significant work remains on the fine print of a deal aimed at unlocking projects worth tens of billions of dollars that have been stuck the drawing board for years. India wants to nearly treble its installed nuclear capacity, which would make it the world's second biggest market after China.
    U.S. officials say details of an insurance scheme to protect suppliers from crippling lawsuits need to be thrashed out and India still has to ratify a U.N. nuclear convention. Indian officials do not rule out completing the process this year.
"We are committed to moving ahead on all implementation issues at an early date," said Syed Akbaruddin, chief spokesman at India's Ministry of External Affairs. "There are no policy hurdles left."
    General Electric and Westinghouse, a unit of Japan's Toshiba, were fully briefed on the meetings of a nuclear "contact group" that hammered out the nuclear compromise in London, say sources with direct knowledge of the talks.
Bringing them into the mix was crucial because the prospect of huge lawsuits, like those against Union Carbide over the 1984 Bhopal gas disaster, has until now kept U.S. and other foreign firms on the sidelines.
India and the United States signed a landmark agreement to cooperate on nuclear power back in 2008. Yet an expected bonanza never materialised because India later passed a law that would expose reactor makers to liability if there was an accident.
The liability issue has became a metaphor for the unrealised potential of the bilateral business relationship and a question mark against Modi's "Make in India" mantra.
   
    "NOT INCOMPATIBLE"
As the days counted down to Obama's visit, Indian officials persuaded their U.S. counterparts that their law was "not incompatible" with international standards that place the burden of liability on the operator, said one senior U.S. official.
    New Delhi also proposed setting up an insurance pool with a liability cap of 15 billion rupees ($244 million). The state-run Nuclear Power Corporation of India would pay premiums to cover its liability. Suppliers would take out separate insurance against their secondary liability - which could not exceed that of the operator - at a "fraction" of the cost.
India must still ratify the International Atomic Energy Agency's Convention on Supplementary Compensation for Nuclear Damage (CSC), which requires signatories to channel liability to the operator and offers access to relief funds.
"We would be looking at how quickly we can ratify the CSC - this is part of our assurance to the suppliers, along with the insurance pool," said an Indian member of the contact group, set up by Obama and Modi at a Washington summit last year.
The U.S. official said Washington expects the Indians to ratify with the IAEA in the near future, along with documentation "stating what their law intends" on the issue of liability, which should offer further reassurance to U.S. firms.
    A QUESTION OF DETAIL
    The U.S. industry would have preferred the issue to be settled by amending the liability law, something considered politically impossible for Modi to achieve at the moment.
    "We want to see all the detail before we say: 'Yes, it works for us'," Westinghouse President and CEO Daniel Roderick, who joined Obama's delegation, told Reuters.
    That note of caution, however, masks the extent to which negotiators engaged with the industry to address fears that it could end up on the hook in a disaster on the scale of the 2011 reactor blasts at Tepco's plant in Fukushima, Japan.
"For the first time, we had a comprehensive inventory of concerns," said the Indian negotiator.
Westinghouse has been granted land in Modi's home state of Gujarat to build six reactors, while GE Hitachi Nuclear Energy is eyeing a similar project in Andhra Pradesh. The liability roadblock has prevented commercial talks from starting on the projects, with a combined capacity of 10,000 megawatts.
    India has 21 nuclear reactors with an installed capacity of 21,300 MW. It plans to launch construction of 40,000 MW of capacity in the next decade.

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What is BPS aka basis points?

What is bps?

 Whenever there is a policy rate changes by RBI, we read this ''term" in newspapers.    The best point is that most of the newspapers also explain the same in one sentence in the same paragraph.   It is a very simple concept and meaning.   

In financial terms, 'one'  Basis Point is a unit  equivalent to  0.01% i.e. 1/100th of a percent.     Thus 10 bps means 0.10% and   100 bps means 1%.    BPs is mostly used to indicate the changes in interest rates and also bond yields.   .

Thus, when news comes that RBI has reduced Repo rate by 25 bps, you should know that it has been reduced by 0.25%, i.e. if the earlier Repo Rate was 4.50%, the new rate will be 4.25%.  Similarly, if you read in the newspaper that bond yields of 10 year GoI Bonds  have gone up by 20 bps in last one month, it means that the yield on bonds have gone up by 0.20%.   Thus, if the a month ago, the yield on 10 year GoI Bonds was 7.90%, the current yield on bonds will be 8.10%.
So, a bond whose yield increases from 5% to 5.5% is said to increase by 50 basis points; or interest rates that have risen 1% are said to have increased by 100 basis points.

For example, if the RBI raises interest rates by 25 basis points, it means that rates have risen by 0.25% percentage points. If rates were at 2.50%, and the Fed raised them by 0.25%, or 25 basis points, the new interest rate would be 2.75%

We have already explained that Basis Point is used for interest rates, but sometimes these days it is used to indicate the changes in the stock too, e.g. some say the stock index has gone up by 150 bps, which clearly means that there is an increase of 1.50% in the value of the stock index.

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The GREXIT fears

Fears about Greece exiting the Eurozone and a global stock market sell off perpetrated by a further slide in oil prices pulled the sensex down by 855 points on Tuesday - its biggest fall in over five years. Falling crude prices which dipped to below the $50 per barrel mark for the first time since 2009 — also unnerved FIIs that aggravated the fall further, brokers and analysts said. The sensex closed at 26,987 and the session left investors poorer by Rs 2.76 lakhcrore (about $43.5 billion) with BSE's market capitalization now at Rs 96.6 lakhcrore.

The day's trading started with the sensex opening about 150 points down, mainly because of Monday's sell-off in the US markets on the back of dipping crude oil price, and soon the index was down over 600 points. After the news about Greece — that a party that has a higher chance of coming to power intends to take the country out of the Eurozone — hit the market, the sensex fell as much as 900 points and recovered just a tad to close 855 points (3.1%) lower. Market players said that if Greece exits the Euro it would be first such case and hence the global market will enter an unknown territory and hence the nervousness among investors around the world.

Compared to the stock market, in the bullion market gold prices inched up to Rs 27,320 per 10 grams, up by Rs 250 because of the yellow metal's safe haven character among asset classes. Rupee on the other had closed flat at 63.39 to a dollar. The benchmark yield on 10-year gilts too closed nearly unchanged at 7.90% level.
In the stock market early on Monday, the sensex had briefly crossed the 28K mark in intra-day trades, at 28,065 and from that level in just two sessions the index has now lost about 1,000 points. Margin calls on speculators by their brokers also aggravated the fall in later hours of trade, brokers said.

"Markets came down sharply driven by a fall in crude prices and accentuated by margin triggers," said Anup Bagchi, MD & CEO, ICICI Securities. "However, fundamental outlook remains optimistic and investors should continue to buy on dips to increase equity allocation," Bagchi said.

One of the main reasons of the slide is attributed to FII selling with BSE data showing a net Rs 1,571 crore outflow on Tuesday while domestic funds were net buyers at Rs 1,190 crore.

A section of the broking community feels that the current slide was corrective in nature and the market will soon turn around. "The correction is nearly over and the market should start recovering soon. In case the US market stabilizes tonight, we will soon see a recovery in the domestic market," said Sudip Bandyopadhaya, President, Destimoney Securities.

In Tuesday's session, of the 30 sensex constituents, 29 closed in the red, with HUL as the lone gainer. Among the top losers were ONGC, down 5.9% at Rs 332, Sesa Sterlite, down 5.1% at Rs 209 and Tata Steel, down 4.9% at Rs 396.

For Wednesday's session, brokers expect some more selling pressure early in the trade and thereafter it would depend on the global news flow. "Looking at the market data (net FII selling, net domestic buying and nearly unchanged open interest position in the derivatives segment which indicates still high speculative interest), there will be selling pressure in the morning," said Arun Kejriwal, director, KRIS, an investment advisory firm. "Global trend will also influence the market trend." Kejriwal said.

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US crude falls. So do the Markets

US crude oil dropped below $50 a barrel for the first time in five and a half years, sending energy stocks into a tailspin and fuelling a broader sell-off on Wall Street that spilled into Asia as fears grew of a global economic slowdown.
The dollar strengthened against a basket of rivals to a nine-year high, while the euro sank to a nine-year low versus the US currency.

The nervous start to the year for financial markets reflected mounting fears that the world was facing the twin threat of slower growth and deflation, combined with worries about the impending Greek elections and the speed of the oil price fall.
The nervous mood in the US and Europe spread to Asia on Tuesday morning, with Japan’s Nikkei 225 falling 1.8 per cent in the first minute of trading and South Korea’s Kospi Composite losing 1.2 per cent.
In the US, investors sought long-dated government bonds as insurance against further downward pressure on inflation and global growth prospects with the US 30-year Treasury bond at its lowest yield since August 2012.
The slump in oil prices helped drag German consumer inflation down to 0.1 per cent in the year to December.
As deflationary pressures intensify in the eurozone, Mario Draghi, the head of the European Central Bank is expected to launch a programme of government bond-buying as a means of boosting inflation expectations.
“The deflationary fear is growing, we are seeing slower global trade, oil and industrial commodities keep falling and the eurozone faces a major challenge in undertaking aggressive easing,” said John Brady, managing director at RJ O’Brien.
The sell-off in stocks had gathered pace on Monday, pushing the Eurofirst 300 index down 2.3 per cent, the UK FTSE 100 lower by 2 per cent while the S&P 500 closed 1.8 per cent lower.
Across share markets, oil companies led losses as BP tumbled 5.1 per cent, Royal Dutch Shell declined 4.8 per cent and France’s Total 6 per cent, while Eni of Italy was down 8.4 per cent. In New York, ExxonMobil was 2.7 per cent lower and Chevron 4 per cent weaker.
This will put the focus on the sector in China, where stock markets open at 9.30am, after a strong rally on Monday that saw energy stocks shoot up nearly 10 per cent. Futures suggest Hong Kong’s Hang Seng Index will fall 1 per cent when it opens.
Both Brent, the international oil benchmark, and West Texas Intermediate, the main US crude, hit levels last seen in the spring of 2009. They have now fallen more than 50 per cent since mid-June.

 

“We may not quite have reached a price level sufficient enough to clear the market surplus altogether,” said David Fyfe, head of research at Gunvor, a Geneva-based trading house. “Prices may weaken a bit further.”

Brent hit a low of $52.66 a barrel in New York afternoon trading before closing at $53.11 a barrel, down $3.31. Meanwhile WTI slid $2.65 to $50.04 a barrel, having earlier breached $50 a barrel.
The euro dropped to $1.1864 in early trading, surpassing even the lows reached during the eurozone debt crisis. The decline followed a story in Der Spiegel, the German news magazine, that Chancellor Angela Merkel was prepared to abandon her commitment to keeping Greece in the currency bloc should the anti-austerity Syriza party take power in this month’s general election and reverse the country’s reform programme.

Germany denied the report and insisted that it was working on the assumption that Athens would continue to fulfil its obligations to international creditors.
Market analysts predict further volatility in European assets this month ahead of the ECB’s first monetary policy meeting of the year and the Greek elections.
“There has been a reawakening of ‘Grexit’ fears,” said Alan Ruskin, a foreign exchange strategist at Deutsche Bank. “Grexit uncertainty could easily persist for the next month, weighing on the euro.”
Others say the uncertainty could last far longer. “2015 is a make-or-break year for Europe,” said Alberto Gallo of Royal Bank of Scotland

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NEFT vs RTGS vs IMPS- Fund Transfers

If you have tried transferring money electronically to an individual or an account, you would’ve come across the terms NEFT,RTGS and IMPS. Most of us are not really aware of the difference between the various models and on what occasions they have to be used.
NEFT (National Electronic Funds Transfer) and RTGS(Real Time Gross Settlement) are the two main fund settlement mechanisms used by banks in India to conduct one to one transactions. These transfer protocols are maintained by the Reserve Bank of India.
IMPS (Interbank Mobile Payment Service/Immediate Payment Service) on the other hand is a mobile based payment mechanism introduced in 2010 by the National Payments Corporation of India to allow customers to transfer money instantly, facilitating instant remittance across multiple platforms.
Intra bank transactions are usually pretty easy as it happens without contact with an external bank. Payment mechanisms like NEFT and RTGS come into the picture when contact with an external banks is involved.
 NEFT
NEFT transactions are usually used to transact in small amounts as there is no minimum amount, but the maximum* amount possible is Rs 5 lakhs. Also NEFT transactions are conducted between banks on net settlements basis, meaning they are conducted in batches and not at the same time as the transactions.
NEFT operates from 8AM to 6:30PM  on weekdays and 8AM to 12:30PM on Saturday,in hourly batches. There are twelve settlement batches on week days and six settlements on Saturdays. Timings might vary slightly from bank to bank.
Transactions made during this time slot are settled within the same day and after the ones ones conducted after the end time are carried out the next day.

RTGS
RTGS transactions are usually to transact in larger amounts in real time, the minimum amount required is Rs 2 lakhs and the maximum* amount is Rs 5 lakhs. RTGS transactions happen between banks in real time and on a gross basis. As this mechanism operates in real time, i.e sans any waiting period, and on a gross basis, i.e settled individually unlike in batches, it is the fastest way to transfer money electronically.
RTGS can be accessed between 9AM and 4:30PM on weekdays and 9AM and 1:30PM on Saturdays. Timings might vary slightly from bank to bank.

IMPS
Using IMPS, a relatively newer service, users can transfer money immediately from one account to the other account, within the same bank or accounts across other banks. Similar to NEFT, there is no minimum amount for transactions, but the maximum* amount possible is Rs 5 lakhs.
Users can carry out Person to Person(P2P), Person to Account(P2A) and Person to Merchant(P2M) transactions from their mobile, Internet or ATM. One of the advantages of IMPS transaction is that it is available 24X7 and even on holidays. This can be payments for utility bills, mobile or DTH recharge, credit card bills, grocery bills, travel ticketing, online shopping and even educational institutes fee payments through this channel.
We had recently written about the growth of IMPS transactions in India, in the past one year. You can see more details on the IMPS procedures here.
Charges
For NEFT and RTGS charges vary from bank to bank, but the RBI has set a maximum limit on what the banks can charge customers. Visit your bank website to see their charges.
IMPS were offered free of cost in order to promote this channels, but most banks usually charge amount similar to their NEFT tariff.
This is just a brief description on the major differences between the three transaction mechanisms for retail banking customers. You can visit the bank website to read about the fine details.
* The RBI has not set a value for the maximum amount possible to be transferred using NEFT/RTGS/IMPS,  but RBI allows banks to place per transaction limits based on their own risk perception with the approval of its Board. Visit your bank website to know the exact amount and charges.

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Benjamin Franklin-

Benjamin Franklin was one of the Founding Fathers of the United States and in many ways was "the First American".A renowned polymath, Franklin was a leading author, printer, political theorist, politician, postmaster, scientist, inventor, civic activist, statesman, and diplomat. As a scientist, he was a major figure in the American Enlightenment and the history of physics for his discoveries and theories regarding electricity. As an inventor, he is known for the lightning rod, bifocals, and the Franklin stove, among other inventions. He facilitated many civic organizations, including Philadelphia's fire department and a university.
Franklin earned the title of "The First American" for his early and indefatigable campaigning for colonial unity; as an author and spokesman in London for several colonies, then as the first United States Ambassador to France, he exemplified the emerging American nation. Franklin was foundational in defining the American ethos as a marriage of the practical values of thrift, hard work, education, community spirit, self-governing institutions, and opposition to authoritarianism both political and religious, with the scientific and tolerant values of the Enlightenment. In the words of historian Henry Steele Commager, "In a Franklin could be merged the virtues of Puritanism without its defects, the illumination of the Enlightenment without its heat." To Walter Isaacson, this makes Franklin "the most accomplished American of his age and the most influential in inventing the type of society America would become."
Franklin, always proud of his working class roots, became a successful newspaper editor and printer in Philadelphia, the leading city in the colonies.[6] With two partners he published the Pennsylvania Chronicle, a newspaper that was known for its revolutionary sentiments and criticisms of the British policies. He became wealthy publishing Poor Richard's Almanack and The Pennsylvania Gazette. Franklin was also the printer of books for the Moravians of Bethlehem, Pennsylvania (1742 on). Franklin's printed Moravian books (printed in German) are preserved, and can be viewed, at the Moravian Archives located in Bethlehem. Franklin visited Bethlehem many times and stayed at the Moravian Sun Inn.
He played a major role in establishing the University of Pennsylvania and was elected the first president of the American Philosophical Society. Franklin became a national hero in America when as agent for several colonies he spearheaded the effort to have Parliament in London repeal the unpopular Stamp Act. An accomplished diplomat, he was widely admired among the French as American minister to Paris and was a major figure in the development of positive Franco-American relations. His efforts to secure support for the American Revolution by shipments of crucial munitions proved vital for the American war effort.
For many years he was the British postmaster for the colonies, which enabled him to set up the first national communications network. He was active in community affairs, colonial and state politics, as well as national and international affairs. From 1785 to 1788, he served as governor of Pennsylvania. Toward the end of his life, he freed his own slaves and became one of the most prominent abolitionists.
His colorful life and legacy of scientific and political achievement, and status as one of America's most influential Founding Fathers, have seen Franklin honored on coinage and the $100 bill; warships; the names of many towns; counties; educational institutions; corporations; and, more than two centuries after his death, countless cultural references.

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How results in Greece will determine World Economy

Many people are wondering why the Greek economy is having  such a major effect on the global markets. Why is such a small country making the world’s major markets rise and fall with every headline that comes out regarding their possible economic collapse?  Fear of the unknown is driving the seemingly schizophrenic markets up and down like a yo-yo.  When Greek Prime Minister George Papandreou presented the idea of a referendum on the bail out uncertainty and fear grew to a fevered pitch.   The masses in Greece did not want to submit to the changes that would be required by the European Central Bank (ECB) for the new bail out loan, but the government believed that without it the economy will totally collapse.  There are two major components to this issue.  First is the chance of Greece defaulting on the bailout loans that they have already been given.  The second has to do with the chance that they could pull out of the Euro as a currency.

When we consider the problems that would occur if Greece defaults, we have to look at how this would affect the lender countries.  Large banks in Germany, France and England have propped up Greece with loans. Greece is not an insignificant economy and it’s failure would send ripple effects throughout the world, think “too big to fail”.  They are also intricately linked to Greece through the European Union (EU).  Many think that if Greece defaults, other members might default as well. The Wall Street Journal stated, “The decision by Greek Prime Minister George Papandreou to shelve the poll capped a tumultuous few days that thrust Athens to the brink of political chaos and forced Europe’s leaders to contemplate Greece’s exit from the single currency.” Source  That brings us to the other major issue. Greece might pull out of the Euro as it’s national currency.  As the seventeen member nations of the EU consider the possibility of Greece rejecting the euro the fear is that other member nations may also follow suit.  This would cause a major destabilization of the remaining EU member’s currency and ultimately their economies.

Some think this is just a problem for the EU, saying, “sure it will impact us but it isn’t really a problem for the United States.”  Unfortunately that is not true.  Many of the large American banks issued default insurance to the banks that were lending to Greece and other struggling nations. If Greece (et al) default, then these major US banks will have to pay out billions to cover the losses.  These are many of the same big banks that were bailed out by the American taxpayer just a short time ago.  Their “toxic” debt was graciously passed on because the government deemed them “to big to fail”.  Sound  familiar?   So there is a very good reason for us to keep our eyes on the developments in Greece  and other EU countries that are at risk of default.  Now, it would seem that we’re tied to their future.

The impending Greek elections will reframe the euro crisis in terms of debt relief. That will force new and adverse scenarios on the region. The repercussions will be global.
Before the New Year, the Hellenic parliament rejected the nominee of Prime Minister Antonis Samaras for president. In accordance with the Greek constitution, a general election will follow on January 25.
Between 2008 and 2015 Greek GDP per capita, adjusted to inflation, tanked from $30,820 to $21,570; that is, 30 percent. After half a decade of misguided austerity policies, the moderate middle has been discredited in Greek politics.

Alexis Tsipras, leader of the radical leftist party Syriza, delivers a speech during a congress of the party in Athens, on January 3, 2015. Syriza.
The conservative New Democracy (ND) is losing its lure. The PASOK social-democrats have shrunk. However, the support of fringe parties has exploded. In current polls, the radical left coalition Syriza garners about 28 percent of the vote, as against 25 percent for the ND, even if this lead has narrowed somewhat.
Led by the young and shrewd Alexis Tsipras, Syriza has played down its radical left-wing left roots and become more populist. It needs mainstream voters to govern.
But what will Syriza do if it wins?
Athens did not return to markets on its own, but after two huge bailouts of €73 billion ($88 billion) and €164 billion ($197 billion), respectively. Behind-the-façade talks have begun over a third bailout amounting to some €20 billion to €30 billion ($24 billion to $36 billion).
By 2012, German Chancellor Angela Merkel was close to permitting a Greek default. But the fear was that if the Greek contagion could not be contained, it could spread to Italy and Spain. As a result, Greece was given its second bailout, but only so that Italy and Spain would be ensured a two-year timeout to stabilize their economic turmoil.

Vowing to challenge half a decade of austerity policies that caused a Depression in Greece, Syriza seeks to expand its constituency by policies that are considered highly controversial in Brussels and Berlin.
These measures include a (big) haircut for creditors; tax cuts for all but the rich; an increase in the minimum wage and pensions to €750 a month; free electricity, food stamps, shelter and health care for those who need it; a moratorium on private debt payments to banks above 20 percent of disposable incomes.
But nothing worries the Troika — the European Commission, European Central Bank (ECB) and the International Monetary Fund (IMF) — more than the Syriza's pledge of an international conference on debt relief, vis-à-vis "official sector involvement" (OSI).
In his meetings with the ECB, Germany's finance minister and IMF executives, Tsipras has said that debt profiling would only involve OSI — a message that his economic advisors have repeated to funds and investors in the City of London.

In 2015, after bailouts that amount to some €250 billion ($300 billion), Greece's current financial needs are estimated at almost €20 billion ($24 billion). These include interest payments, IMF funds repayments, ECB's maturing bonds, and arrears.

External assistance will only come with strings attached. In December, the sixth review of the Greece's bailout program was not completed but extended until the end of February 2015.
Until the election, the IMF, which currently remains the only OSI provider of funds to Greece, and the Hellenic Financial Stability Fund are hedging their bets. The recent widening of the Greek government bond (GGB) spreads indicates that volatility is largely confined to Greece in Europe; at least, for now.
In the past few years, Brussels has managed to build insulation mechanisms to reduce the probability of contagion. Nevertheless, these mechanisms rely on the market expectation the ECB is about to shift to broader quantitative easing (QE).

The ECB's full QE is expected to include purchases of the larger Southern European economies (e.g., Spain and Italy), which are seen as too-big-to-fail — but not necessarily those of smaller peripheral countries (Greece, along with Portugal and Cyprus).

The real drama starts, when Syriza and the Troika will begin their negotiating gamble in the end of January. Tsipras has set the tone by saying that his government would cease to enforce the bail-out demands "from its first day in office."
He is hoping that the Troika and Germany would blink and support Greece, despite Athens' controversial policies.

However, from the creditor standpoint, the blink scenario could unravel the 2010-14 austerity policies because it would provide an incentive for other fragile euro economies to engage in similar hard bargaining with the Troika and thus reverse much of the past progress.
So another scenario is that, instead of the Troika, Syriza will blink. In this scenario, the radical left would allow the dilution of its social policies, but not its pledge of an international debt conference. The party would seek debt relief reminiscent of that granted to Germany in 1952 (62 percent). This scenario would cut significantly the general government debt, which today exceeds 190 percent of the Greek GDP.
In this case, Tsipras would be likely to get a call from the ECB and his response would be: "Do your worst."
But what if neither the Troika nor Syriza would blink?

In this scenario, the Troika would bet that the radical left will collapse politically under escalating economic pressure. Whereas Syriza would presume that the Troika would not dare to show the euro door to Greece because that would risk the progress that Brussels has achieved since spring 2010.
In this scenario, the subsequent volatility would shake the markets, and Athens would be forced to exit the euro zone, which would serve as a warning to Italy and France to stay the course. In turn, Brussels would bet that it can absorb the shock associated with consequent economic shocks.
Whatever the final scenario, the repercussions will reverberate not just in Greece or the euro zone, but across the global economy

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