Tuesday, January 31, 2012

Desperate times needs desperate measures


Read the above link. The RE mafia is luring cash rich investors and thus staying afloat weathering the slump in the sales. Behind the lines, we need to understand that  they are expecting end users (like you and me) to blink first and fall into their trap. They are holding steady and slightly having upper hand at this moment. The forces working in their favour are

1. Indian Government and their corrupt politicians
2. RBI ( It is trapped into it unknowingly or knowingly)
3. People who already invested in RE ( They are sentiment creators)
4. Share Market ( Sentiment Creator)

But even the mighty federal reserve could not stop the slump in their real estate. We need to wait and watch when the law of natural correction sets in. So far the indications are negative. The indications in our favour is

1. Food Inflation which nosedives showing signs of going up ( ask the vegetable vendor)
2. Many banks started showing negative returns this quarter ( read financial results)
3. Equity markets are at resistance zone
4. News flow from Europe dried down
5. Indian fiscal deficit is at record heights and babus cannot look other side. This budget would be a great disappointment.

Crash is near. Hold on . sit tight.

Sunday, January 8, 2012

Can he resist the pressure and temptation?

 I am referring to Mr.Subbarao who handsomely withstood pressure last month.When we talk about interest rate cuts, the first salvo you are facing is that 'everybody expects rate cut'. Why everybody expects rate cut and still RBI may not doing that? Let me think on your behalf :)

1.  Food Inflation figures what we saw is a mirage. Our diet is not only the Onion and Potato. We consume much more than that for example protein diet and milk which is not coming down and in fact it is going up.
              a) This food inflation is just a part of over all inflation. Over all inflation is still high and not showing signs         of cool off.
              b) This vegetable prices also seasonal. next month it may shoot up. So cutting rates based on these figures would be foolish to be frank.
               c) Expectation of further rise in fuel price is going to affect Inflation again.

2. When we say 'everybody expects rate cut means who are we referring? Real Estate developers, Real Estate Investors and Stock Market Investors..sadly these people are less than 5% of our population.

3. A rate cut now will again feed for the bubble on one hand in RE sector whereas, I am 300% sure, that this is not going to help the Industrial output because our industrial problems are not due to rate cuts.  See the export and import data to figure out why?

You know what. RBI knew all this. But whether they can withstand the pressure from Industry lobby and Politicians? Time only will tell.

Weekly Analysis of Nifty - Infy and IIP

The week gone by shows how the cartel of stock markets operate in tandem to loot from retail investors world over. All markets moved in tandem without any major fall inspite of euro weakness.

Inspite of Euro collapsing well below 1.30 up to 1.1.2697 equity markets hold fort. Dollar index crosses 81.5 comfortably but Rupee appreciates below 53 levels. In short term this kind of manipulation works but over the period of time these things cannot be sustained. But can we stay short until market returns to sanity?

Two important news items expected this week. IIP data and Infosys results. IIP data is expected to be positive after a dismal -ve data last time. Also due to Rupee weakness Infy is expected to post a spectacular results. so on paper the setup looks great for a rally. Market players are expecting a rally up to 4900 at least.
Also the market manipulators keep up their pressure on RBI to cut the interest rates.

FII data mostly points towards upsides. There are conspiracy theories about FII derivative data. From the start of the series they are long in 56000 contracts with 1700 Crores OI addition. But they net bought only less than 50 Crores. How to intrepret this? I will try my best and come with a analysis soon.

No new shorts. Wait for 4675 and below or 4850 and above for new shorts. I am still hoping for a crash in January end or February due to europe issues. The governments are struggling to find buyers for bonds which is evident from the news emanating from euro zone. Euro value is tripping. If they struggle to sell 10 Billion euro bonds how come they are going to sell 200 Billion bonds? Let us wait and see. No wrong if you are not in short but a strict no no to longs.

Friday, January 6, 2012

Something about my favourite punching bag - 5

Concerns also escalated about Spanish banks after Spain’s economy minister told the Financial Times that they will have to set aside as much as 50 billion euros ($65 billion), which amounts to 4% of Spain’s gross domestic product, in extra provisions on bad property assets.

Bad property assets???? Remember spain had housing bubble until last year just like what we have now ....

Tuesday, January 3, 2012

Sucker Jokes by market Mafia - Car Sales

All along I have been maintaining that market manipulators spread false news which will affect unsuspecting investors. One such example I can show you from yesterday.

Yesterday Bajaj Auto declared sales figure for Month of December. For a person who wanted to show this as a good news he can easily show by putting a headlines that screams "Bajaj Auto Sales in December rises 10%." When you read into the article you would find that the 10% increase is as compared with December 2010. But what actually happened?

Compared with November there was a fall of 27% sales in Bajaj Vehicles. Now think.


Please compare the total car sales for maruti and hyundai for November and December ( December is supposed to be boom period for car sales with discount). I have observed there is a fall in sales between november and december.

January would be further worse. :)

Slowdown?? what slowdown??

When you try to caution your near and dear ones about the imminent slow down in Indian Economy they would stare you as if you are an unwanted insect.

At best we can give some clues and we cannot force feed anybody. I am trying my best because these kind of slow down would really hurt you. For example, consider one who buys an Apartment / Plot at this exorbitant price and surely we are going to see at least 30% correction. Assuming the price is 40 Lakh today, easily we can see a loss of 10-12 Lakh within 12-24 months. That is nothing but a loss.

Until last month (Even in Dec) we see fall in sales of 4 wheeler manufacturers. Don't be fooled by the biased reporting from some of the newspapers. See the sales report of Maruti and Hyundai who sell many more vehicles compared with other small players. Small players sell far less vehicles which cannot be compared. At that time many thought 2 wheeler segment is not affected. Alas, Yesterday we see that Bajaj Auto tanked 9% because of slow growth in sales. TVS Motors also slowing down. So this shows clearly slowdown is started.

Go to any small town in India as ask for RE activities. People say that all stopped. At least in Tamilnadu I have confirmed this myself and there is no activity of RE whatsoever. People who bought recently could not come to terms with this and are still maintaining it is nothing. But for the people who expects and waiting for correction this means a LOT.

The Real Estate Bubble has sucked the liquidity from many and now the second stage of Real Estate Crash
or to put it mildly Real Estate Correction is going to happen. If you are a so-called investor in real estate better sell whatever you have at some reasonable rate quoting now and get out or tighten your seat belts.

Mr.Singh has indicated the priority is to set right govt fiscal deficit. So freebies for Real Estate sharks is out of question. Moreover govt itself is begging now in the streets because of its mismanagement.

btw, do you know Indian Gold Imports falls 56% this quater? News to Think Guys