When will the global economic malaise end

It is now painfully clear that some parts of the world are in recession. Others, tom-tommed to be the “growth engines” of the world, have started sputtering, with growth estimates halving from what was considered a breze even 6 months ago.

Several nations including the US, UK, Germany and India have initiated “economic stimulus” or “bailout” packages. Interest rates have been cut to make credit available to companies. But there are no conclusive signs yet that we’ve turned the corner or that the worst is behind us. On the contrary, each day brings gloomier news about companies laying off people, announcing 50-100% fall in profits or simply filing for bankruptcy protection. Not surprisingly, the stock markets continue to be volatile, even as the real estate markets threaten to correct further.

Economic pundits around the world are stymied by two key questions:

1. What needs to be done to accelerate the global economy’s exit from this seemingly never-ending morass?
2. How long will it take for the global economy to get back on even keel and start growing again?

I certainly am not an economic pundit and nor do I claim to have the answers to the above questions. However, I think that the solution lies in everybody pulling their weight. While governments structure bailout or stimulus packages and regulators tighten regulatory frameworks to reduce fraud and implementation of investment decisions that go against accepted risk management norms, we as citizens of the countries we live in must play our role too. Pay your taxes on time, do not cut down spending altogether-although by all means, be more cautious and live within your means.And do not believe this mumbo jumbo about India’s economy being decoupled from the rest of the world. Of course, companies must also act responsibly- reduce costs, improve productivity, defer investments/capex without harming competitiveness (especially where such investments will increase the debt and hence interest burden).

And as far as timeframes go, let me add my naive guesstimate to the mix. I think most skletons will come out of the closet during 2009. By this time next year, the market will start believing that the worst is truly behind us. Then the process of rebuilding will start- with central banks walking a fine line betwen driving growth and curbing inflation. The joker in the pack, as always, will be geopolitical stability around the world and the consequent impact on oil prices.

Federer vs Nadal

I was hoping Federer would win the Australian Open today and equal Pete Sampras’ record of 14 Grand Slam titles. Sadly, that was not to be. In a hard-fought 5 setter, a younger, fitter Rafael Nadal got the better of Roger Federer (7-5, 3-6, 7-6, 3-6, 6-2) in a match that lasted nearly 4.5 hours.But I have to confess that “Rafa” was awesome. His fierce cross-court returns, top-spinning slices and volleys won him the day. And keep in mind that he played the finals one day after another 5 hour semi-final where he was extended by compatriot Fernando Verdasco (Nadal won 6-7, 6-4, 7-6, 6-7, 6-4).

I have not seen Federer teary-eyed before and at some level, it was gut-wrenching to see a champion of his stature and class crying. But what struck me even more was Nadal’s empathetic response: at the award ceremony, he began by saying “sorry for today”- that he was sorry for having beaten Federer and denying him his 14th Grand Slam.Nadal went on to say that Federer is a champion and that he would equal Sampras’ record soon.

Here’s wishing Federer his 14th Grand Slam in 2009- and “Rafa” many more successes in the years ahead.

Australian cricket team’s crisis of confidence

Ever since the retirement of McGrath, Warne and Gilchrist (and Justin Langer) in somewhat quick succession, the Australian cricket team has lost its cutting edge. Hayden’s recent retirement and Symond’s self-destructive moves haven’t helped either.

New talent has been blooded and in another year or so, Australia will have rebuilt its team. There is talent aplenty in the Husseys, Shaun Marsh, Michael Clarke, Mitchell Johnson and many others. But after the India tour and the recent loss to South Africa in both the test and ODI series, the Australian team’s self-confidence has been low. Even in today’s ODI match against New Zealand, Australia steadily lost wickets and ended up with a below-par 181 runs. But what was important was that they were unable to defend the total, although they did make early in-roads into the New Zealand innings (and there were a couple of bad umpiring decisions).

There have been flashes of dominance but of late,  the legendary team cohesiveness and “never-say-die” attitude that kept Australia at the top for more than 15 years, have been conspicuous by their absence, for the most part.