India’s Economy Surpasses That Of Great Britain

Mr. Shah is a Schwarzman Scholar at Tsinghua University specializing in economics and a former McKinsey consultant.

As Theresa May returned home from her unsuccessful visit to India, she would bear witness to another relegation for the UK: India’s economy will be larger than the UK’s, for the first time in more than 100 years. This dramatic shift has been driven by India’s rapid economic growth over the past 25 years as well as Britain’s recent woes, particularly with the Brexit. Once expected to overtake the UK GDP in 2020, the surpasso has been accelerated by the nearly 20% decline in the value of the pound over the last 12 months, consequently UK’s 2016 GDP of GBP 1.87 trillion converts to $2.29 trillion at exchange rate of ~GBP 0.81 per $1, whereas India’s GDP of INR 153 trillion converts to $2.30 trillion at exchange rate of ~INR 66.6 per $1. Furthermore, this gap is expected to widen as India grows at 6 to 8% p.a. compared to UK’s growth of 1 to 2% p.a. until 2020, and likely beyond. Even if the currencies fluctuate that modify these figures to rough equality, the verdict is clear that India’s economy has surpassed that of the UK based on future growth prospects.

This marks a significant landmark in India’s economic history, whose story over the last 150 years can be split into three parts: a period of divergence, of relative stagnation and a period of convergence with respect to the economy of the UK. Divergence begins with the UK’s industrial revolution in the 18th century to India’s independence in 1947 when the UK’s growth significantly outpaced India’s. The period of stagnation extended from 1947 to 1991 where both India and the UK grew at roughly the same rate. This was despite India being independent, and was predominantly due to India’s misinformed choice of pursuing a closed, centrally planned, socialist economy. Convergence began in 1991, when India finally implemented market reforms, and continues to this day. During this period India has experienced much faster economic growth than the UK and has finally in 2016 overtaken it in absolute terms, although is still less than one-fifth that of the UK in per capita terms.

History teaches us that milestones are important, that they can help clarify and bring to light underlying long-term trends, as well as encourage people to shed their biases. Japan’s victory over Russia in 1905 is an illustrative example: The event helped break the conception of the inability of the East to militarily defeat a western power and also highlighted the economic rise of Japan that had gradually taken place over the second half of the 19th century. India’s overtaking of the UK’s GDP in 2016 could serve as a similar moment.

Wells Fargo Account Openings Fall For Third Month

Figures cap a difficult week, after regulators impose sanctions for other failings.

Wells Fargo has said the number of customers opening accounts has dropped sharply for a third consecutive month — underlining the scale of the fallout from the recent scandal over its sales tactics.

Customers opened 41 per cent fewer Wells Fargo current accounts in November than they did a year ago and made 45 per cent fewer credit card applications.

These figures cap another difficult week for the bank, which is trying to restore trust after thousands of its employees — under pressure to meet internal sales targets — created as many as 2m “phantom” accounts for customers without their knowledge or consent.

On Tuesday, US authorities barred Wells Fargo, the third-largest lender in the country with $1.9tn in assets, from establishing new international units or from buying companies that are not banks, after it failed a regulatory test for reasons unrelated to the sales debacle.

Watchdogs warned that they were not satisfied with the bank’s “living will” — its plan to wind down in an orderly manner in the event of a crisis.

Wells, which had its first attempt at formulating a living will plan rejected earlier this year, is the first US bank to have regulatory sanctions imposed on it as a result of a second failure.

However, analysts said the financial hit from the drop in account openings should be limited, unless the downward trend continued for several months. Wells has around 23m primary checking customers.

In November, the drop-off in new account openings eased modestly compared with the previous month, when current account openings declined 44 per cent and credit card applications were down 50 per cent.

Nevertheless, the sales scandal — together with the regulatory backlash over Wells’ unsatisfactory living will — has undermined the retail-focused bank’s reputation for steering clear of the compliance problems that engulfed many all Street rivals.

John Shrewsberry, Wells’ chief financial officer, acknowledged: “It’s designed to pick up whatever the regulatory supervisors are feeling, or understanding or experiencing at that time.” But he added: “If we do a very thorough job . . . I think that we would have achieved the objective.”

Other metrics that Wells disclosed on Friday showed signs of improvement. Customers closed 13 per cent fewer checking accounts in November than they did in the previous month.

Mary Mack, who runs Wells’ community banking division, said the latest declines were “as expected”. “I’m really focused on getting things right for the long term,” she said, adding that “customer experience scores” had also improved.

A new repercussion of the account opening scandal emerged earlier this week when Prudential Financial became the first outside company to take action over it: the insurer suspended a distribution deal with Wells while it assesses how its life policies were sold by the bank.

Financial markets seemed unconcerned by the account opening numbers, though. Shares in Wells were little changed in Friday morning New York trading.

They remain up 22 per cent since the US election, partly because investors believe that the compliance burden on the bank will become lighter under the Trump administration.

Are Black Friday And Cyber Monday Really The Biggest Sales Days Of The Year?

More U.S. shoppers rushed to their mobile devices, rather than physical stores, on Black Friday than ever before, spending a record $1.2 billion from their phones and tablets and $3.34 billion overall. Maybe that’s no surprise as the mobile-crazy generation takes over the buyer’s market.

But Black Friday and Cyber Monday may be getting a run for their retail-coveted money. Single’s Day — China’s biggest online shopping day — finally made its way to the U.S. and is gaining momentum. Earlier this month, Chinese e-commerce behemoth Alibaba said Singles Day sales reached $17.8 billion, up from $14.3 billion last year.

U.S. retailers are hoping for a bit of that November 11 magic. “The amount of [U.S.] retailers every year who have come on board for Singles Day is growing,” says Jennifer Wang, cofounder of online shopping recommendation site Dealmoon. “Now most have heard of it, and it’s one of the biggest holidays for them to prepare.”

Next year you might be buying up department store deals earlier than ever before.

Better Rules, Long IPO Wait Mean Secondary Market Boom For ‘Unicorns’

After the debacle that preceded the initial public offering of Facebook Inc in 2012, when the company’s stock changed hands at wildly varying prices and with little oversight, the market in secondary trading in shares of hot startups has made a strong comeback.

Regulators and the startups themselves have gradually tightened rules governing buying and selling shares, while a growing number of startups delaying their IPOs amid a wash of eager private capital has created a huge swell of demand among both buyers and sellers.

“A lot of companies learned from the headaches that Facebook had to deal with,” said Brian Feinstein, a partner at Bessemer Venture Partners, which has purchased early investor and employee shares in secondary transactions.

The market serves a few functions, allowing employees and founders at highly valued private companies, such as home-renting service Airbnb and ride-services firm Lyft, to cash in on some of their paper wealth, and letting institutional investors get a piece of the action. Early investors who are tired of waiting for a payout are selling shares in secondary trades, too.

With such demand, transaction volume on the secondary market has soared.

A new report to be published this week by Scenic Advisement, a San Francisco-based investment bank set up in 2013 to facilitate secondary stock transactions, pegs the total value of tradable shares among the top private U.S. companies at $35 billion. That is more than three times the $11 billion assigned to the asset class in 2011, Scenic said in the report. The bank is projecting a further jump to $38 billion next year.

Secondary market transactions more than doubled to $544 million in the first half of 2016 over the same period last year, according to Nasdaq Private Market, one venue for such trades, set up in 2014. It expects further growth in 2017.

Founders Circle, which has made secondary trades in shares of DocuSign, Pinterest and others, estimates a total of about $1.2 billion worth of secondary transactions this year, according to co-founder and managing director Chris Albinson. That is a dip from $1.6 billion last year, largely caused by a dearth in trading in the first quarter, but Albinson expects a year-on-year increase to $1.4 billion in 2017.