Tue, 17th January 2017

Anirudh Sethi Report


Archives of “Supreme Court of the United States” Tag

Emerging Markets -An Update

Hong Kong Chief Executive Leung Chun-ying said he won’t seek a second term.
Korea’s parliament voted 234-56 to impeach President Park.
Czech National Bank raised the possibility of negative rates to help manage the currency.
A Brazilian Supreme Court justice removed Senate chief Renan Calheiros from his post, but was later overturned by the full court.
Brazil central bank signaled a possibly quicker easing cycle.

In the EM equity space as measured by MSCI, UAE (+6.2%), Poland (+6.0%), and Mexico (+5.9%) have outperformed this week, while Czech Republic (-0.6%), Hong Kong (-0.2%), and China (+0.6%) have underperformed.  To put this in better context, MSCI EM rose 2.8% this week while MSCI DM rose 2.8%.
In the EM local currency bond space, Brazil (10-year yield -60 bp), the Philippines (-59 bp), and Indonesia (-40 bp) have outperformed this week, while India (10-year yield +20 bp), China (+5 bp), and Czech Republic (-1 bp) have underperformed.  To put this in better context, the 10-year UST yield rose 3 bp this week to 2.41%. 
In the EM FX space, BRL (+3.1% vs. USD), COP (+2.9% vs. USD), and CLP (+2.8% vs. USD) have outperformed this week, while EGP (-2.3% vs. USD), CNH (-0.8% vs. USD), and SGD (-0.7% vs. USD) have underperformed.
Hong Kong Chief Executive Leung Chun-ying said he won’t seek a second term.  He cited family reasons.  The next chief executive will be selected in March by a committee of 1,200.  China has veto power over the final selection, and so it’s clear that another establishment leader will be chosen. 

Court tells govt: Spell out figure – Lens on withdrawal sum; govt bares retention plan

The Supreme Court today directed the government to spell out by December 14 a minimum weekly withdrawal limit that banks cannot deny to customers, after the Centre said the previously announced Rs 24,000-a-week limit was a “ceiling, not a minimum”.

Many banks have been refusing this amount citing a cash crunch and forcing customers to settle for sums ranging anywhere between Rs 3,000 and Rs 10,000, senior counsel and Congress politicians Kapil Sibal and P. Chidambaram had earlier told the court.

While clarifying on the matter, attorney-general Mukul Rohatgi said the government had no intention of replacing the entire volume of the old notes in new currency: it would leave a gap of Rs 1.5 lakh crore to promote cashless transactions.

 The bench of Chief Justice T.S. Thakur and Justices A.M. Khanwilkar and D.Y. Chandrachud was hearing a batch of 32 petitions and applications from individuals, groups and political parties complaining about the hardship caused by demonetisation.

At the next hearing on December 14, the court will sift through them and frame the questions it needs to answer, including one on the constitutional validity of the demonetisation and the curbs on cash withdrawals.

Justice Thakur indicated that if necessary, the court might refer the matter to a five-judge Constitution Bench.

“We assume you (the government) are capable (of replacing the withdrawn currency). Your estimate shows you are in a position (to do so) but what has happened?” Justice Thakur asked.

Rohatgi said the government needed time till December 31.

“Are you agreeable that if there is a (lower) limit imposed by us, then no bank will deny withdrawal of the money? We will make sure that Rs 24,000 is withdrawn by each person?” the Chief Justice said.

Rohatgi clarified: “The Rs 24,000 limit is a ceiling, not a minimum limit.”

The bench then said: “If he (customer) has a legitimate right, then let there be a limit below which banks cannot deny.”

Rohatgi said the government would then have to rework the limit. “If not Rs 24,000, let it be Rs 10,000, but it must be given,” the Chief Justice said.

The court quizzed the government on the speed of currency replenishment. “How much money is being printed? How much is being infused?” it asked.

Rohatgi said the government had so far collected between Rs 11.5 lakh crore and Rs 12 lakh crore in old currency, having initially expected about Rs 10-11 lakh crore. “It (the government) may get another Rs 1 lakh crore.”

Justice Thakur said the court was conscious of the “larger objective” of the demonetisation but asked whether the government had “properly applied (its) mind” while undertaking the drive.

“Was there any material before you that were apprised? How much money will be lost? How we will meet the situation? Was there a plan (about what the) banks should have to take care of when a situation like this arises?” he asked.

“It is one thing to completely stop (the use of old notes) and another thing to intelligently regulate.”

Rohatgi acknowledged “some amount of inconvenience” to the people but cited the incentives for digital transactions that the government had announced yesterday by offering concessions at petrol stations and in insurance payments, among other things.

Supreme Court refuses to stay demonetisation move: 5 key takeaways

The Supreme Court on Tuesday declined to stay the demonetisation of Rs 500 and Rs 1,000 currency notes announced by Prime Minister Narendra Modi on November 8 but wanted the government to justify the drastic step through an affidavit. The court will examine its legality with reference to the provisions of the Reserve Bank Act.
Here are the latest developments on this issue:

1. The bench presided over by Chief Justice T S Thakur clarified that it did not intend to interfere in the economic policy of the government, but asked the Attorney General to file an affidavit explaining what steps the government had taken to ensure liquidity.

2. It asked the Centre to explain the steps it has taken or will take to deal with the chaos outside banks and ATMs following the demonetisation move and observed that people should not suffer.

Senior counsel Kapil Sibal said, “We are with the government incurbing the black money, but the inconvenience it is causing to the public is jeopardising their life.”

3. Everyone carrying Rs 500 or Rs 1,000 cannot be painted as a black money hoarder and will take up the case again on November 25 after government’s reply.

Volkswagen gets final approval for $15bn clean-diesel settlement

The court overseeing US civil claims against Volkswagen gave final approval on Tuesday to one of the biggest consumer settlements in American history, bringing to a close a central chapter in the emissions scandal.

One week after a three-hour hearing in which more than 20 opponents to the settlement voiced their complaints, US District Court Judge Charles Breyer gave a thumbs up to the $15bn settlement, saying it met the court’s requirement of being fair and adequate

“Given the risks of prolonged litigation, the immediate settlement if this matter is far preferable,” he said in the ruling. “As the Court stated at the outset, the priority was to get the polluting cars off the road as soon as possible.”

The settlement, announced in June, was the result of negotiations between VW, several US regulators, and lawyers representing almost half-million car owners.

Supreme Court asks RBI: 87 owe Rs 85000 crore, why not make their names public

Image result for supreme court indiaUnderlining that 87 persons owe more than Rs 85,000 crore to public sector banks (PSBs), the Supreme Court said on Monday that the Reserve Bank of India (RBI) should not work in the interest of the banks but in the interest of the country which calls for disclosing the names of the biggest defaulters.

After going through a list of defaulters submitted in a sealed cover envelope by the RBI, a bench led by Chief Justice of India T S Thakur disclosed that there are 87 individuals who owe Rs 500 crore or more to the banks and bad loans on account of their default to repay totalled Rs 85,000 crore.

“See this amount…if we had asked for details of those who owe Rs 100 crore, this could be another Rs 1 lakh crore…why should we not put the names of these defaulters in public domain? The RBI publishes a list of wilful defaulters every year. It does not matter whether they are wilful defaulters or not but they certainly owe Rs 500 crore and more to the banks… people may have a right to know,” said the bench, also comprising Justices D Y Chandrachud and L N Rao.

RBI was asked to explain the huge amount of loans written off by PSBs in the last five years after the top court took suo motu cognizance of The Indian Express report dated February 8, 2016, that Rs 1.14 lakh crore had been written off as Non-Performing Assets (NPAs) by 29 state-owned banks in the last three years.

Builders have developed attitude of not fulfilling promises: Supreme Court

Real-estate firms on October 18 got a rap on their knuckles from the Supreme Court for making tall claims to purchasers which remained unfulfilled due to inordinate delay in completing the housing projects.

“In this country, builders have developed an attitude to make committments to the purchasers and not fulfill them by delaying the projects,” a bench headed by Justice Dipak Misra said.

The apex court’s observation came after real estate firm Parsvnath Buildwell Pvt Ltd said it will give flats to 70 home buyers, who are before the court, by December 17.

“They (home buyers) do not have patience and trust in you and need refund. Money should go back to them and they should not suffer,” the bench also comprising Justices Amitava Roy and A M Khanwilkar said.

The bench, also pulled up the realty firm for seeking time to deposit additional Rs 10 crore, asking “why do you get into all this business when you can’t pay back the money You have to give back the money to home buyers.”

Senior advocate Subramanian Prasad, appearing for the firm, said that as directed by the court, the company has deposited Rs 12 crore with the Supreme Court registry. The bench asked Supreme Court registry to disburse Rs 12 crore to the 70 home buyers on pro-rata basis after proper identification.

Brazilian Senate to Hold Vote on Rousseff Impeachment on Wednesday Morning

Brazil's suspended President Dilma Rousseff attends the final session of debate and voting on Rousseff's impeachment trial in Brasilia, Brazil, August 29, 2016Brazil’s Supreme Court President Ricardo Lewandowski had held consultations with senators and was ready to schedule the special session for the vote on 11 a.m. local time (14:00 GMT), the Globo news portal reported on Tuesday.

The portal added that if 54 senators voted for the impeachment, Rousseff would be removed from office, otherwise the impeachment would be terminated and she would resume the presidency. In May, the upper house of the Brazilian parliament voted 55-22 to start impeachment proceedings against Rousseff after she was accused of concealing the country’s budget deficit ahead of the 2014 election. Rousseff regards the impeachment proceedings as an illegal coup attempt. Rousseff has been suspended from office for 180 days. Vice President Michel Temer has being fulfilling the functions of the presidency during that period.

I-T Department considering banning cash deals over Rs 3 lakh

The government is examining a recommendation by the special investigation team to ban cash transactions of over Rs 3 lakh in a bid to clamp down on black money in the economy, a top tax official said on Tuesday.
“These recommendations have come. It (banning cash transactions over Rs 3 lakh) is under examination. SIT recommendations are under consideration,” Central Board of Direct Taxes (CBDT) chairperson Rani Singh Nair told reporters on the sidelines of an Assocham event in New Delhi.

The Income Tax Department, she said, has already put a 1% tax collected at source (TCS) on cash transactions of over Rs 2 lakh and made quoting of Permanent Account Number (PAN) mandatory for transactions above Rs 2 lakh through any paymemt mode.
“All these aspects are part of SIT recommendations to stop use of cash in the economy. Suggestion on Rs 3 lakh and above is under consideration,” she said.
CBDT had earlier clarified that no tax will be collected at source when cash component of the payment for goods and services is less than Rs 2 lakh even if the total consideration is more than this amount.

Clinton Presidency Would Likely Take Hawkish ‘Cold War’ Stance With Russia

A 2014 US-backed coup in Ukraine followed by a referendum, in which Crimea voted overwhelmingly to rejoin Russia, sent Washington-Moscow ties on a downward spiral that continues to feed distrust between the two global powers.

“If Clinton is elected, there’s going to be some level of continuity with [US President Barack] Obama because they share the same type of worldview and to some degree a similar foreign policy,” University of Dayton Political Science Professor Daniel Birdsong told Sputnik.

Birdsong explained the mindset as one in which engagement is primarily diplomatic, and if military intervention is involved, a reluctance to deploy US “boots on the ground,” a reliance on airpower and the use of local proxies in combat zones.

The approach, he said, is reminiscent of President Bill Clinton’s interventions in the Balkans in the 1990s.

The hawkish image projected by Clinton could be rooted in her being the first female presidential candidate from a major political party, Birdsong explained.

“She has to contend with a stereotype of women being weaker on national defense, on military engagement,” Birdsong said. “Her taking a muscular stance on foreign policy, or with Russia more specifically, has to do with that.”

Trump Surges In Latest CNN Poll, Takes 3 Point Lead Over Hillary

Accelerating the post-Trump speech/RNC convention “bounce” we noted over the weekend, CNN today reports that Trump has taken a dramatic 48% – 45% head-to-head lead over Hillary in the latest CNN/ORC Poll, conducted July 22-24. This represents a substantial 6% surge in support for Trump since the last poll conducted on July 16, and opens up Trump’s largest lead over Clinton since September 2015.