Weekly Wrapup: Pain Points
In this week's wrapup, we will talk about why Franklin Templeton had to wind down its debt schemes, why the government is (reportedly) scrapping the Insolvency and Bankruptcy court, what happens when a country prints more money, and the challenges Spotify is likely to face in India.
The Fault in our Funds
On Monday, we spoke about the mutual fund industry and why Franklin Templeton had to wind down 6 different debt schemes. Franklin Templeton has always had a reputation for being one of the best in the business — especially with Debt mutual funds. They’ve managed to beat their peers largely by resorting to a risky approach that has paid off in spades.
But now, that the pandemic is here, it has amplified risks across the board. And even great fund managers have to face the music. So if you are looking for an explainer with the full low down on what went down at Franklin, look no further, we've got you covered here
No more Bankruptcies?
On Tuesday, we talked about the government's plan to suspend the Insolvency and Bankruptcy Code (IBC) for 6 months.
In 2016, the IBC was introduced to provide a legal framework for banks to take defaulting companies to task. But with the nationwide lockdown in place, thousands of small and medium enterprises are finding it extremely hard to make ends meet. If banks drag them to court for defaulting on their payments now, that would be a travesty. However if you disband it entirely, the consequences can be disastrous too.
How disastrous? Find out here.
The Government's guide to printing money
On Wednesday, we spoke about the delicate art of printing money. The country’s fiscal deficit (government borrowing) stood at 5% of the country’s GDP- a far cry form the target of 3.8% this year. But the thing is, the health crisis at hand demands that the government keep spending- on subsidies, healthcare, infrastructure etc. And to fund this massive spending spree, they need to call on the Reserve Bank of India.
But will the RBI intervene?
More importantly should it intervene?
Find out what we think right here.
Spotify's Desi Streaming Challenge
On Thursday, we spoke about the challenges Spotify is likely to face as they expand in India. For any music streaming platform, their music library is one of their biggest assets. They need to house all the international hits other platforms have, and also cater to local tastes. But for Spotify to be able to provide you with an infinite library of tunes, it has to buy the music first. And this licensing process is not just costly, it is insanely complicated.
So how does Spotify continue to make headway in a market that's already seeing intense competition. Find out here.
Thank You :)
On Friday, we took a break from writing to celebrate the fact that we reached 100,000 subscribers on Finshots! And we owe it all to you.
Thank you for spreading the word. Thank you for critiquing us. Thank you for offering us valuable inputs and most importantly thank you for taking this newsletter to your friends and family and vouching for us. You have no idea how much this means to everyone in the team. We are forever indebted.
On that happy note, we say goodbye for now. See you on Monday!
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