The scam was written all over the wall yet no one saw it coming — The $65 billion MADOFF scam happened not only because regulators failed but also because investors forgot investment basics: greed overcame rationality, and when greed overcomes rationality, people like Madoff prey upon investors’ greed. Bernie Madoff, born in 1931, had a long connection with the financial world. He first opened his…

How do banks create money? Fiat currency The currency notes that circulate today, by their very nature, don’t have a value. The value of the paper or the metal used in making notes and coins doesn’t match the value printed on the paper or coin. For example, the paper that makes the…

I focused on the negatives and made my life worse — Electricity disruption “This is the worst place to live; why did we move here,” I said to dad on my second day of madness; why was I mad: Well, electricity had been eluding my house, and with temperatures soaring to 42 C, I was seething with anger — my anger reached a…

An imbalance between three pillars is causing chaos — The article is based on the book The Third Pillar Death rate rising The death rate of middle-aged non-Hispanic white Americans between 1999–2013 was higher than that of other ethnic groups — Half a million more Americans in that group died than other ethnic groups. Those with a high school degree or less…

Why do Banks need SWIFT? — SWIFT forms the bedrock for international financial transactions. International transactions refer to the movement of money beyond the country’s borders. The international transactions can range from payment instruction from a bank and Forex transactions to transactions requiring processing, settlement of securities etc. SWIFT: an information highway that connects banks

Bond price is inversely related to the market interest rate — I hear interest rates, and I think, “how much my bank will pay me for parking my money in the bank?” For borrowers, the interest rate decides how much they will have to pay for taking a loan from the bank. Beyond those two contexts, the interest rate is rarely…

People are asking questions that decide whether they should express condolence or hatred — The death of a dear one can be devastating life-changing for people. It takes time to come to terms with the death of a loved one; All of us know that death is imminent, but what takes us by surprise is the timing. The death of a person lingers with…

Nominal Interest rate and Real interest rate — Banks are a great place to keep money, apart from convenience, you earn interest for parking your money with the bank. How much interest you earn depends on the interest rate? Interest rates are of two types: nominal and real. Nominal interest rate The nominal interest rate (advertised rate) calculates the amount you…

Why are we being Racist about a war? — Blood is red everywhere; the loss of a family member is bereaved equally by people across the globe, or is it that a section of the population has different colour blood because their skin colour is different? What astounded me was the racist overtone creeping in the Russia-Ukraine coverage. Is…