Monday, December 10, 2012

Last flourish

The positive momentum is gonna to go away within few weeks/months.

Whatever said and done, domestic mutual funds withdraw 45k - 50k from Indian stock markets and it is only the FII who are investing. Chidambaram historically believes to measure the economy's growth using nifty levels. So he must be happy.

Yes, we are tired of predicting as the government machinery is fully supporting the unethical business practices, real estate bubble  etc etc. But there is a limit to everything. Whatever you can control within your control you can manage, but India has reached a point where we can no longer stage manage certain things.

1. Real Estate price is not international. It is within India you can manage. You don't want to regulate. You don't want to prick the bubble. Let it be. We will come to this later.

2. Gold price is international. You cannot control. Now shamelessly Government is asking people to stop buying gold and note here it is the only instrument which withstands the government fueled inflation assault. Not only government is asking, even they put pressure on RBI officials to ask people not to buy gold.  Poor RBI fellows!. They forget basic economics and dance to the tune of government.

3. Rupee conversion rate. If huge money is stuck and hoarded in real estate. Every company is investing in real estate where is the real money to do real business? Now, a stage will come where everybody will think it is better to buy some flats and need not do any other business. This has come already. I saw in a kirana shop in addition to prices of dal and oil they have put prices of houses also ! ROFL!. Coming back to the point, the Rupee value nosedived to 55 now. This inspite of artifical euphoria about the 'so called reforms' act of selling money making business to foreigners.

4. The export sector will get a beating only due to inflation effects mark by words. Rupee can easily touch 60 and above. Whatever election games played by Government they cannot control gold price, Currency etc. That will cause doom to this comedy.

5. Reserve bank may cut rates. And I am wondering if the government and RBI is making unnecessary noises about cutting rates ( cheap money) how the hell the inflation will come down? Do we all forgot basic economics?

6. I wonder now every business leader and stock market operator is predicting that the economy is bottoming out. What is the evidence Mr?  It is going down and it is gonna to accelerate  See the IT companies. They have managed their balance sheets for couple of quarters  now they cannot continue that. Some skeletons will tumble out soon. Other industries will follow.

7. If govt stop playing in interest rates, banks also will face the music. There will be times where government will be made to stop playing in interest rates and the time is very near due to Rupee conversion and all.


If US recovers, FII will pull out the money and run out of sinking ship India that will cause a massive crash in indian stock markets.

Wave counts also indicates the top is very near.

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