Weekend Links + Cartoon of the Week

I will start a weekly blog, on interesting links and markets related stuff ... every weekend - stuff that I trawl the internet (many blogs and twitter) ... and collate it here.

Hopefully you find this fun. All the information here should be publicly available (I will refrain from putting in proprietary research from my firm, or sell side analysts)

Feedback, Comments and Criticism all is welcome.
________________________________________________________________________________





Jackson Hole speech by Yellen saw a lot of coverage (which you might have already read) but my colleague in NY has put up the Central Bank tea leaves ... 

-Fed Chair Janet Yellen - rate hike odds have 'strengthened' {http://po.st/Qb0Cye}

-Fed Vice Chair Stanley Fischer - Number of hikes this year depends on the data {http://po.st/sdLwgs}

-Kansas City Pres Esther George (a voter) - "Time to move rates higher gradually" {http://po.st/di72eh}

-St Louis Fed James Bullard (a voter) - September might be "a good time" to raise interest rates {http://po.st/Gm50ag}

-Dallas Fed Robert Kaplan (a non-voter) - case for increasing rates "building"  {http://po.st/O96qCH}

while a picture attached (always better than a 1000 words) - says it all ... about a 40% chance of a hike in September.

While a lot more ink has been spilt on the event, I doubt anything resulted which was as good (this cartoon is my best ever ... ) 

link http://niravstoons.tumblr.com/image/149536839945 

 

Moving on from the Fed ... these are the few interesting links I found this weekend 

1. How much control does China really have? 

Its a bit controversial topic, but the author points out that the Local Governments arent following the orders on capacity reduction (unlike how they did in the upcycle of capacity addition) - Definitely worth a read for all China watchers 

https://www.linkedin.com/pulse/how-much-control-does-central-government-really-have-china-gordon-orr

2. Should the Glass-Steagall act be reinstated? 

While both the Presidential Nominees have been railing against Wall Street, and proposing to clamp down profits by regulation, Alex Tabarrok of GMU (and Marginal Revolution blog) looks at it.  

http://www.theatlantic.com/business/archive/2016/08/glass-steagall/496856/

3. 2 links on the distortions by Central Banks 

ECB buys bonds via private placement 

http://www.wsj.com/articles/sellers-paradise-companies-build-bonds-for-central-bank-to-buy-1471815100 

US stocks bouyed via SNB buying 

http://www.zerohedge.com/news/2016-08-04/mystery-buyer-revealed-swiss-national-banks-us-stock-holdings-rose-50-first-half-rec 

4. Canary in the Coal Mine for China's offshore currency 

The recent stability in the Renminbi is unlikely to last, looking at the falling offshore renminbi (CNH) deposits, which signals renewed currency turbulence in the future

http://www.ft.com/cms/s/0/657ab100-65f3-11e6-8310-ecf0bddad227.html#axzz4Ic5MDUkh

5. Upcoming Pension Crisis in Europe 

http://www.ft.com/cms/s/0/8a54a0c6-648b-11e6-a08a-c7ac04ef00aa.html#axzz4I9Vs0gXK

surprisingly Poland has the largest unfunded pension liability to GDP ratio

In case you are thinking I am all doom and gloom ... 

6. Singapore has experimented with the first driverless taxi

http://www.wsj.com/articles/worlds-first-self-driving-taxis-hit-the-road-in-singapore-1472102747

I have already registered on nutonomy.com for a test ride. Have you? 

Bonus Link

A new earth like planet found in another solar system ... 

http://www.newyorker.com/tech/annals-of-the-future-world/an-exoplanet-too-far?mbid=rss

I guess will be before our lifetimes where humans will have to colonize another planet 

My thoughts on the new RBI governor Dr. Urjit Patel

Note: These are my personal thoughts on the incoming RBI Governor, and in no way do they reflect the official view by my employer. Do not treat this as an investment recommendation, and anyone reading this blog should do their own investment research. 

You all might have noticed that the Reserve Bank of India ("RBI") has appointed Dr. Urjit Patel as the next RBI governor, after the term of the current Governor (Dr. Raghuram Rajan "RRR") expires on September 4th, 2016.

While there has been a lot of ink split on the new appointee, (see this excellent profile about him -> http://www.livemint.com/Politics/0rj1YspRYkXlqEMF61TwqM/Who-is-Urjit-Patel.html) and given he is a sitting Deputy Governor (one out of four who hold that post) this spells continuity.
This picture says it all

On the policy front, he is expected to be on the hawkish side, given it was his own recommendations that suggested RBI formally target inflation, with a target of 4% +/- 2% and maintain a real rate of of 1.5% over the CPI (which rules out immediate rate cuts) given the last inflation print was 5.7%.

Another important distinction I would like to draw about Urjit Patel which probably is unique compared to the others in running for the post, or previous RBI Governors.
While he has impeccable academic credentials (M.Phil from Oxford, PhD from Yale)

He is neither a career academic (like predecessor Raghuram Rajan, or Arvind Subramanian and Arvind Panagariya) ...
Nor is he a career bureaucrat rising the rungs either through RBI, or civil services. (like DV Subbarao, or other current Deputy Governors R. Gandhi, H.R. Khan, and Shaktikanta Das who was in the fray)
Also he isnt a career banker (like SBI Chairperson Arundhati Bhattacharya, HDFC bank Chairman Deepak Parekh, ex ICICI Chairman K.V. Kamath)

Given his wide variety of experience, both in government and private sector (at IMF, advisor to Boston Consulting Group, on board of Reliance Industries and non executive director in Gujarat State Petroleum Limited) he should be more industry oriented, than a pure academic.

Typically (my speculation, and non scientific observation) - Academics hold on to their ideas, and do not work easily with the Government (remember the not to subtle differences of opinion between Raghuram Rajan and the Finance Minister Jaitley), while career bureaucrats probably bend too easily to the wills of the government. (And probably are more sympathetic to the previous ruling party - which was in power for most of their career)
At this juncture, Indian policy making is in a state of flux. There are new taxes (GST) replacing the old, new Bankruptcy Code has been passed by legislature, while corporates are crippled with high level of debt, and banks saddled with the NPAs. More over RBI itself will have a new structure.

Hence rather than a specialist in a single domain, you need some type of an all rounder. (Or as Nate Silver from fivethirtyeight.com says - Hedge Hog and not a Fox)Also - with the new RBI structure (6 member committee on Monetary Policy, consisting of one Governor, 2 Deputy Governors and 3 appointees from the Government), the RBI Governor has a lesser power than before, a person from private sector, and a relative outsider would be better suited to getting consensus in the committee.

Another thing - Urjit Patel has been media shy, and unlike RRR, would not be speaking to media on areas outside his domain (policy making, religious intolerance ...) which is the reason why the Hard Right Wing of the BJP turned against RRR.

Another bit of insight is, Urjit Patel was born in Kenya, and has lived majority of his life in the West, (which might bring barbs from the Hard Right wing of the ruling party about being an outsider) and only took up Indian citizenship when he was appointed as a Deputy Governor in Jan 2013.
Though this speculation has been shot down for the moment, as the extreme right has endorsed him (for now) http://indianexpress.com/article/india/india-news-india/dont-be-an-idiot-subramanian-swamy-on-attacking-urjit-patel-2987777/

Also - while being foreign born, he is a native Gujarati speaker, same as the Prime Minister (Narendra Modi) and BJP party president Amit Shah, and rumored to be close to Amit Shah. Thus despite being hawkish on monetary policy he might be able to better communicate his views to the PM, who (its well known) isnt as articulate in English. (Was this a reason he got the job?)

The Government has appointed a Governor, now the speculation moves to who the 3 government nominees would be, (if rumours are to be believed - some of the names mentioned above, and a couple of Sell Side Investment Bank Economists are in the fray)

Anyways - I wish the new RBI Governor good luck, and hopefully he steers the Indian Economy well.
As for the previous governor, I am a big fan of his writing, (read both of his books) and looking forward to his next one. 

Books by Raghuram Rajan
Saving Capitalism from Capitalists 
Fault Lines

Books by DV Subbarao
Who Moved My Interest Rate

Disclaimer - I am a mere observer of the Indian Financial Market, and by no means an expert. Any thoughts, counter arguments and brickbats are welcome.

Adventures of Tintin with the Gujarati Grandmom

Its a hot and humid summer in suburban Bombay (that's what it was called in the 1980s). Mrs Maniben Trivedi, was baby sitting her two and half year old grandson, while her pregnant daughter was working.
Times were tough, her son-in-law was struggling to manage documents to be able to get a home loan, for his apartment. Her daughter, already pregnant with a second child, was worried about how will money come to support two children, when they could barely support one despite both of them working.

Mrs Trivedi, already had five grandchildren from her two sons, and this sixth one was the most restless. Already bored of her stories, he refused to sleep at nap time listening to the folklore of the "bodio wagh" or the man eating tiger who had his tail cut off. He would complete all her lullabies, and short stories, and said he wanted something else.
On that hot, humid sweaty month of May, Mrs Maniben Trivedi, thought up an idea to keep this little child occupied.
She picked up a comic book belonging to her older grandsons - "Tintin and the Adventures of the Unicorn", and told her grandchild #6, lets read a new story.
Now the problem was, Maniben couldn't read English, (having studied till 2nd grade in Gujarati), and her two and a half year old grandson couldn't read.
But still, looking at Herge's artwork, they deciphered a story, which they made up themselves.
There was a dog, a young boy, but the main character of their story was the older bearded guy "Captain Haddock".
A few years later, when her grandson could read, and he read that comic again, he fondly remembered the stupid plot from his childhood, which he and his grandmum cooked up.  And laughed at her inability to read English.

Many such hot, humid, sweaty summers have passed, but her grandson still remembers those afternoons. He still refuses to believe Tintin is the main character of those comics, and not Captain Haddock. He drinks like a fish, and swears like a sailor ... and tries to draw cartoons whenever he can.

Mrs Maniben Trivedi passed away at the age of 92 yesterday.
She raised 3 children - a doctor, an engineer and a lawyer.
Helped raise 7 grandchildren, and saw 10 great grandchildren.

She got married as a teenager, and spent 77 years with her husband.
One year (to the date) after her husband passed away, she succumbed to her illnesses.

Her grandchild #6, the troublesome one with the short attention span, still tries to draw and create stories, which they made up thirty years ago.
When he is not drawing, he writes his random mumblings on this blog.
And he still thanks her, for teaching him how to picture read.

Bihar Elections - Why are they important for an Investor in India

Executive Summary
India will see the State Assembly elections in Bihar in late October with results announced on November 8th.
This election is crucial as allows the ruling party at the Center (BJP) gain seats in the Upper House of the Parliament "Rajya Sabha" , where they are lacking majority. 

A BJP win would ease passing of any new legislation, (key bills were blocked in the Rajya Sabha) and hence markets would view this as a positive event, and Indian Assets (Stocks, Rupee, Bonds - Government and Corporate) would rally.
Needless to say, if the opposite happens, markets would expect slower pace of reform, and it is negative for Indian Asset prices.

The elections are too close to call, given 3 other major parties (JDU, RJD, INC) have united to form a Grand Alliance ("GA" or "Maha Gathbandhan")
In the 2014 General Elections, though BJP (+allies) had around 35% vote share, they managed to win 31/40 seats in a 4 horse race.
Now that other groups have united, it remains to be seen if electoral math is like simple arithmetic.
Also in a 2 horse race, a small change in vote share will lead to a large change in number of seats (e.g. getting 51% votes in all constituencies, would lead to winning 100% of the seats, though the win is only by 2% in vote difference)

What would I do to hedge:
with the rally in markets, volatility is cheap, and there is good value in buying NIFTY options (OTM puts) or USDINR calls
In case of a BJP win, if INR strengthens, RBI most probably would intervene to prevent excessive strengthening. 
While Equity markets though wouldn't see any intervention, the reaction could be a lot more 


For those who want more detail on the subject

What is Bihar? 
Bihar is the 3rd largest Indian State by population (104 million people) and 13th largest by area. Also one of the most backward states, with the lowest levels of per capita income and literacy among the major Indian states.
Its importance can be gauged by the fact it sends 40 Members of the Parliament "MP"s to the Lower House ("Lok Sabha") and 16 MPs to the Upper House "Rajya Sabha"
(Disclaimer: the author hasnt ever been to Bihar nor has any plans of visiting in the immediate future)
Also among other things, it is where Buddha attained enlightenment. 

Then why is it important for an Investor? 
Bihar is up for elections (Oct to Nov 5th, with the results on Nov 8th).
This election is a litmus test for Prime Minister Modi's ruling party ("BJP"), against the Grand Alliance "Maha Sangathan" comprising all major opposition parties in the region (JDU, RJD and INC) which have united against BJP.
Bihar is crucial, as a victory in Bihar would allow BJP to gain crucial seats in the Rajya Sabha in 2016. (Rajya Sabha members are nominated on the basis of the percentage of seats won by the parties in the State elections)
At the moment the BJP lead ruling coalition ("NDA") has a majority in the lower house "Lok Sabha" of the parliament, but major bills being pushed by them like the Goods & Service Tax (GST) or the amendment to the Land Acquisition Bill, have been blocked by the Upper House.
If BJP wins Bihar, it would have a lot smoother time, without key legislation being blocked. 
If BJP loses Bihar, this would mark the end of "Modi wave" which saw BJP win 4/5 states post the General Election in 2014.
By losing Bihar, and no major elections in 2016, only hope of Modi gaining majority in Upper House would be in 2017, and thus limiting the ability of passing any difficult reforms.
In terms of markets this is a digital event. 
Modi wins -> boost to investor confidence and indian asset prices, 
Modi loses -> negative sentiment for indian asset prices. Probably BJP government turns a lot more populist. Then we see more stagflation. 

What does the Electoral Math look like? 
While in 2014 General Elections all the 4 groups contested separately, and while NDA (BJP lead coalition) had about 35% votes, in a 4 horse race, they managed 31/40 seats.

This time round given the 3 major opposition groups have combined forces, simple arithmetic would suggest a win for them. (Ignoring other fringe groups)

Though given the fact that one of the three (Indian National Congress) is a non entity, and hasnt won an election in Bihar since 1990, the other two (Rashtriya Janata Dal or "RJD") and Janata Dal (United), "JDU" have been bitter rivals in the last decade, and were hurling insults at each other. 
"Will voters see this as opportunism or pragmatism."
Thats the 2 trillion dollar question (size of India's GDP)

Getting into caste, religion, and other local agenda is beyond the scope of this blog, hence I leave you with a few links if you want to expand your reading 

Wikipedia isnt a bad place to start https://en.wikipedia.org/wiki/Bihar_Legislative_Assembly_election,_2015

Milan Vaishnav of Carnegie Endowment has a comprehensive piece 
http://carnegieendowment.org/2015/09/30/battle-for-bihar/iid1

Karthik Shashidhar in Livemint - why Bihar elections are too close to call
http://www.livemint.com/Politics/V9IPlwt2M9lZdiALgbBRLM/Why-the-Bihar-polls-are-too-close-to-call.html

India - some facts and charts about the last year

My Friend Pranav Kumar put up a post on Facebook about the negativity in India about the current year.


Pasting his post Verbatim

Tired of some of the fact-free negativity around India. So putting it out there (I put this as comment on FT):

Some big picture facts on Modi's 1st Year (Using nos for Apr 14-Mar 15):

1. Real GDP growth - 7.3% (vs 6.9% year earlier)

2. Inflation - 3.8% at end of July'15 (vs 7.73% in Aug'14)

3. Net accrual in Foreign Reserves - $61 bn (vs $16 bn last year).

4. Net FDI flows - $33 bn (vs $22 bn last year)

5. Current account deficit - $ -28 bn (down from -$32 bn last year). Much lower as % GDP

6. Fiscal deficit (% of GDP) - 3.99% (vs 4.5% last year)

7. Rupee - one of the best performers among all EMs.

8. Financial inclusion - 175 million households enrolled into banking system - this is more than what UPA achieved in last 3 years as per CMIE. Similar scale difference on toilets in schools.

9. Resource auctions - Rs 3 Lac Crores income - that's 18% of annual central budget - for government from Coal and Telecom auctions which were done transparently (as opposed to Congress which gave them to cronies and now the ministers are being probed/jailed). Govt is tracking on goals of 24/7 electricity.

10. Foreign policy - Modi's performance is by far way ahead of any other prime minister.


(Source: RBI, CSO)
------------------------------------------------------------------------------------
Sounds like a fantastic year to me. However much Modi's critics want him to fail, his own excellence plus the oil windfall has led to great results in year 1. Happy independence day!

------------------------------------------------------------------------------------

I decided to do put up charts (Note the change in trajectory for the last one year versus previous 5)

All data is from Bloomberg, and tried to use it from 30-Jun-2009 where available (since thats post Great Financial Crisis - which distorted lot of data in 2007, 2008 and some part of 2009)

Some places where data series has changed (e.g. CPI or GDP) I have used old and new series for what ever time line is available. 



India GDP
White - New Series (not enough data); Yellow - Old Series



India Inflation
Yellow - Wholesale Price Inflation; White - Consumer Price Inflation (new series, no history) 




India FX Reserves (USD trillion) 


India Current Account Balance (USD billion per quarter) 

India Fiscal Deficit (% of GDP) 
EM Currencies Performance - 2009-14
(Total Return = Interest + Currency Performance) 

EM Currencies Performance - 2015 




Conclusion:

While in the previous 5 years India was getting worse, some of the remedial measures have been taken by RBI governor and then Finance Minister in 2013, but now from 2014, India is surely on a firm footing.

Thoughts on Singapore

Singapore recently celebrated 50 years of being an independent nation, and there was a huge amount of celebration, and rightly so. (I though used the holidays to get out of Singapore and get a cheap holiday)

I have spent the last 5 years here, and despite my love hate relationship with Singapore, this city has given me a lot.
From a directionless and choppy career in banking, atleast this place has let me firm up my goals and career interests.

Thanks to my regular pub quiz nights (Tuesday Trivia), I do have friends from various nationalities and backgrounds, while earlier in London and Dubai, all my friends were either Indians or Bankers ... and then the conversation gets extremely boring.

Singapore is one of the few truly global cities, where no matter where you are from, it can be like home.

Though my own assimilation in Singapore remains incomplete. I scored 4/5 on this test of Singlish

Some more links about Singapore (thanks to social media)
50 reasons why Singapore is the best City - CNN
50 pictures of old Singapore you might not have seen before
Kishore Mahubani on Why Singapore is the worlds most successful society

Tyler Cowen (blogger at Marginal Revolution and Prof at George Washington University) has a few great posts on Singapore. At times it takes an independent outsider to be able to get an accurate view

Why is Singapore Special - Great Leadership, efficient bureaucracy, great food.
A Simple Theory of Singapore Complaints - Many Singapore residents would be better off if in some regards the country were not so nice. That is a hard problem to solve, but in some ways a nice problem to have.
Singapore as a Financial Corporation - this is the best one, its basically a mega hedge fund with some citizens.

Some of the recent success, (especially financial) has come with the twin tail winds -
1. Easy US monetary policy (US Federal Reserve printing money, and this easy money leaking into emerging markets)
2. Breakneck Chinese Growth (and probably a lot of it debt fuelled)
These two phenomenons are now reversing, and thus the tailwinds would turn to headwinds.
Though given the strong institutions built in Singapore, it should be robust enough to withstand the turning tide.

While the last 5 years have been enjoyable roller coaster ride for me, looking forward for 5 more.

Mahjula Singapura! (Onward Singapore)

P.S. - For the Trivia Nerds some #SG50 questions from the great Caleb Liu (picked from his FB wall)

1. There are two other countries that gained their independence in 1965, both former British colonies like Singapore. The first is the smallest country in mainland Africa by area, the second is an island nation and archipelago. Can you name them?

2. Buildings in Singapore have a maximum height restriction due to aircraft overflight restrictions - what is the maximum height in metres? Also, three buildings share the honour of being the tallest in Singapore as they are all built to this maximum height. What are the three buildings?

3. Which seafood restaurant, which still has a prominent outlet near the East Coast Park lagoon, is famous for inventing pepper crab (Note NOT Chillli Crab which is disputed)?

4. Singapore's MRT system was first opened in 1987 with a stretch of 5 stations running between which two stations? Name both of them.

5. Which area of Singapore has a name that originates from Kampong Shan Ting or literally "pavilions on the green" which accounts for the colourful roofs of its HDB flats. It also formerly contained a canal known as "dead chicken river" because people used to throw dead animal carcasses into it?

Crumbling Rupee, the reasons and the solution

I think the value (or lack of) the currency exchange rate has reached the common man. As a Non Resident Indian, visiting India, its surprising to find taxi and autorickshaw drivers complaining about the falling rupee. This has caused a lot of debate in social media and others, and these are my thoughts 

Do note: This blog is my personal view, and doesn't reflect the view of my employers. 

The main reason for falling rupee was that India Imports more than it Exports. Though the rupee was stable, since this trade deficit was being financed by foreign portfolio flows investing in Indian equities and debt, and suddenly with signs of US economy improving, they are moving their money out. 

Looking at numbers: Imports $40bn a month, Exports $32bn a month (goods + services) 
Hence now India needs to buy this $8bn a month (add to the selling by foreigners) at the prevailing price in the market, and due to laws of supply and demand, rupee is falling.

India is particularly vulnerable as it runs a twin deficit. A trade deficit (imports more than exports) and a fiscal deficit (government spends more than it collects via taxation). 

What caused the sudden spiral? 
The straw which broke the camels back, was the US Federal Reserve announcing tapering the pace of 'Quantitative Easing' (In simple language printing money to buy back their debt) 
Though the intention was to keep interest rates low to boost growth in US, (companies could borrow to invest, households could borrow to buy houses and consumer goods) the side effect was many investors chose to invest overseas for higher yield in Emerging Markets, and India was one of them. 
Now as US yields rise, India doesnt look as attractive anymore. 

Why is India more vulnerable than other Emerging Market Countries? 
Simply put, India imports more than it exports. The balance was being financed by foreigners buying Indian stocks, bonds, and Indian companies borrowing offshore, plus some remittances by NRIs. 
Looking at some numbers: 
Imports: USD 40bn a month, of which crude oil is $15bn, Gold and Silver is $5bn, Coal and Iron Ore is $2bn. Rest is flat screen TVs, iPhones, iPads and what not.
Exports: Goods worth $25bn, and Services (software and BPO)  $7bn. 
Thus India has a trade deficit of USD 8bn a month. 


Shouldn't weaker Rupee imports fall and exports rise? Now with India's imports they have been fairly inelastic, (falling rupee hasnt seen the volumes of imports falling) which is mainly due to 

1. due to subsidies on oil products (diesel, kerosene, and LPG) consumers don't feel the pinch of the rising prices directly. The deficit is borne by the taxpayers indirectly. 
2. Indians have a cultural affinity for Gold, when rupee falls, Gold looks more like a safe haven, though it behaves like a speculative asset. (i.e. when price rises, demand also rises) 
3. India has one of the largest reserves of coal and iron ore. But due to the corruption in handing out mining licenses, there have been lot of court cases under RTI. Hence the supreme court has put a blanket ban on mining coal and iron ore. This has caused India to move from Net Exporter to Net importer of coal and iron ore. 

Exports too have been inelastic. i.e. volumes havent gone up, despite falling rupee making it cheaper 

1. Constraints of manpower (bad labour laws) and electric power supply make scaling up in manufacturing difficult. 
2. Textile industry which was a pollutant has been shut down and mostly relocated to Bangladesh and Vietnam. 
3. while US and Europe seem to have come out of recession, their growth isn't so high that their demand for Indian exports rises.

Why don't we see Foreign Direct Investment - given India's size and consumer demand?
India's rules and red tape have made it quiet unattractive. 
e.g. after all approvals, Vendanta and Posco's aluminium and bauxite investment plans were vetoed by tribal families (~300 families). These investments were worth billions of USD. 
There is no clarity on FDI in retail, or in many other sectors. 
Post the Vodafone case, the GAAR rule on taxation and retrospective taxation makes it difficult for people to want to invest in India.
Also note, US economy is 8-9 times the size of the Indian Economy. Hence when US was growing sub 1% and India more than 9% investing in India looked attractive. 
When US economy is expected to grow at 2.5-3.0% and Indian economy at 4.5% India doesnt seem as attractive (due to low base) 

Despite these reasons why the sudden large moves? 
Basically once it becomes a self fulfilling prophecy we can see large scale capital flight. 
Exporters will not remit money back to India and keep money offshore. 
Importers will over-invoice and transfer money offshore.
NRIs might choose to wait before remitting (since they feel will get it cheaper a month later)
Some portfolio investors seeing the crashing rupee and the stock market would panic and sell their Indian investments. 
This is more due to crisis of confidence, and this is where the Finance Ministry and the Reserve Bank of India can step in to curb this crisis of confidence. 
But in the longer run India should address the fault lines. 

Even other currencies are falling (South African Rand, Brazilian Real, Indonesian Rupiah, Turkish Lira) 
These countries too have a large current account deficit. At the other end of the spectrum are South Korean Won and Taiwan Dollar, which have done well, as they are net exporters, and stand to benefit from US and Europe growth picking up.

Why can't RBI do anything? 
RBI has a trilemma, to maintain stability in inflation, growth and currency (or current account) 
It cant have all 3 together, and one has to be sacrificed. 
The only tools it has is interest rates and money supply, and given the problems are fiscal, RBI's monetary policy cant do much. 
(they have hiked rates to protect the currency, but that makes growth come lower)
Given the problem is fiscal and political, the solution too should come from politicians and not RBI.

What has been done to address the fall?
RBI has hiked short term interest rates by 3%, and raised taxes on Gold imports, curbed speculation by banks, and limited amount of money that can be remitted offshore by locals. 
Finance Ministry has announced duties on imports and curbs on getting in Flat Screen TVs.
They have also let Oil Marketing Companies borrow USD directly from RBI via a swap line. (which can be repaid later, IF rupee becomes stronger)
I think these measures are short term at best.

In the longer run more structural issues need to be addressed.
Reviving stalled power projects, reform of labor laws would go some distance in improving productivity and raising our goods exports. 
Tightening the belt on fiscal spending, should keep inflation in check and regain investors confidence to buy Indian assets when they are cheap. 

For more see the video with Arun Shourie (ex minister for disinvestment in the NDA government) and Ruchir Sharma (of Morgan Stanley Investment Management) discuss the "Rise and Fall of Indian Economy" with Prannoy Roy of NDTV. 
http://www.ndtv.com/video/player/ndtv-special-ndtv-24x7/the-rise-and-fall-of-india-s-economy/287650?curl=1377409227

What can an ordinary citizen do? 
There isn't much at an individual level. Each one buying swadeshi goods doesn't solve the bigger problem. (There is no Swadeshi Oil)
Voting for a party which is willing to take short term pain for longer term development might be the answer. (Don't know which party though)

After US mortgage crisis (leveraged households), European sovereign debt crisis (leveraged peripheral European nations), we might see the beginning of the Asian Financial Crisis (leveraged corporates) and this might be as bad as the Asian crisis in 1997-98.
Hence we might see things get worse before they get better. 

I do believe India has enough low hanging fruit, and the right political will should see growth rising again. 
This crisis might just force the leaders to take tougher decisions.