Lakshmi Iyer sees market volatility as new normal amid complex US and global debt issues

"The worst spreads that we saw was north of 7% and today, we are at well under 2%, the absolute lowest that we have seen in the last 20 years," says Lakshmi Iyer, Kotak Alternate.

The yield spreads, I mean between India and the US is now as low as just about 175 basis points and it is the lowest in the history that one has seen of bond spreads. How do you read this and what is the market telling you?

Lakshmi Iyer: So, before I jump straight to the markets, I am a big fan of McDonald's and when McDonald's came into India back in the late 90s, the price of a Mac Burger versus a vada pav, the gap was over 8x to 9x. And circa today, the gap has shrunk to maybe 5x or maybe 6x, that clearly, if I take that analogy and take it to the bond markets whether it is US bonds versus Indian bonds, it is a very similar kind of trend that we are seeing.