Mango's take on October 29

Raghuram Rajan raised the repo rate and signaled that he wants to attack inflation and he also made right noises about...

1. Inflation
2. Real positive return for savers
3. Importance for CPI

Meanwhile markets liked it, mostly they expected it as the bankers are gushing about the reduction in the MsF. Also the bankers get extra repo windows in 7-day and 14 - day. The FII's who drive indian markets are going to show new high in next few days ( possibly in 2 days)..will this bring retail investors into share market? I hope not.

Also whatever RBI eased is not going to help the corporate mafia and this will surely help banks to window dress their balance sheet for another 1 or 2 quarters. But surely the end game has begin for Indian banks.

Nationalized banks balance sheets are showing the true situation nowadays. Have a look at Syndicate bank and Maharashtra banks results announced in this 2 days....now since 2 banks has come out with ugly results all the bankers who were waiting in the sidelines to declare their results will come out.

these nationalized bank guys were waiting for some banks to declare results so that their number did not look ugly. Interesting.

Now I think with increasing inflation RBI is gonna to raise REPO every month and it is fun time. Meanwhile the much awaiting festival session is failed as per the preliminary news. But the end result has not come yet...

Let us wait.

This country is going to collapse

"இந்த நாடும் நாட்டு மக்களும் நாசமாக போகட்டும் "

The above is a famous dialogue from a tamil movie which roughly translates into "This country and its people are going to suffer badly". This aptly fits to India's current state of affairs.

Today IIP data comes are 0.1. I am pretty sure that the govt spin masters did not want to show negative figures for second consecutive month. So they made as if it looks like a positive figure. The drama does not end here. The brokers ( lets cut rates lobby) started their rheoteric and this time they are very arrogant. They said that they are not bothered about inflation. So now the cat is out of the bag. We know all along these b******s are not bothered about aam aadmi and they are concerned about their fat paychecks and corporate profits. Since they are earning in crores in case of slow down or recession they can leave happy life. Only the middle class herd crowd will suffer hugely. Sadly this middle class idiots are not understanding this and playing cheer leaders to corporate mafia.

If we cut interest rate, we are officially gonna to say that our interest rate is fuckingly low than the official inflation. Won't foreigners laugh at us by seeing this.  Remember I am not talking about the CPI which many countries use. We talk about WPI.  CPI is 10 and more. WPI is 7 and more. Now already our interest rates are less than inflation which is a great joke. But we are now going to do that in terms of WPI. RBI is going to be a laughing stock.

Dont forget the currency is damaged and out of shape now. The prudent way is to raise rates. That is what a educated banker is supposed to do.

Also please dont forget that the rate cut will not be passed on the customers. It will be eaten by the banks.

RBI is misssing another golden opportunity to prick the bubble.

But one silver lining is Chakravarty is making right noises. But one summon from north block will make these guys to eat humble pie.

My solution
*******
Increase rates by 2 percent. We will be OK within one year.

Desperate times needs desperate measures

http://economictimes.indiatimes.com/markets/real-estate/news-/builders-find-ways-to-stay-afloat-hold-on-to-property-rates/articleshow/11680915.cms

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.

Are we stronger than China?

Are you kidding dude?

No! I am just telling how manipulated India markets are and how ignorant the general public is..Please go through this link and the see the expectations from BRIC's for coming 2012.
http://economictimes.indiatimes.com/news/international-business/bric-countries-growth-story-coming-to-an-end/articleshow/11285589.cms

What is interesting here is that the chart given in the article. Almost all the 4 charts are looking strikingly similar but if you observe China chart, it is different from others. In china the recovery post 2008 is not huge.  After 2008 (Lehmann Collapse), Chinese markets are not insanely up like India. During 2007 peaks chinese index and Indian index both touched highs of 6000 above. But now Chinese index is languishing at 2200 levels and we are at 4700 levels. What is the logic here?

My point is Chinese behaved maturely in handling the crisis. That did not exactly 'excites' their equity markets but they are better off in main stream economy. Now they can afford to cut interest rates in case of crisis. Remember their steps to cut the Real Estate prices and other activities.

We, in India danced to the tune of corporate mama's/mafia's and corporate brokers and did not handled the issue maturely and tried to appease the equity markets and see where we are...

Time to rejoice -3

http://in.finance.yahoo.com/news/real-estate-prices-correct-now-030000562.html

I am trying to collect the number of articles talk about the imminent correction in RE sector. This above article in Yahoo talks clearly about the happenings.

I knew this would happen - time to rejoice

http://www.dnaindia.com/mumbai/report_mumbai-developers-run-for-cover-cut-property-prices_1624999

It seems somebody is screwed up in Mumbai.  Time to celebrate.

I sincerely hope it spreads like a wild fire in India.

We get what we deserve - Part I (Real Estate Bubble)

In the background of Euro crisis the question on everyone mind is what is in store for us for medium to long term. I feel medium term Indian economy is going to suffer and markets will fall huge. 

The long term growth story of India is intact. Everyone seems to be agree on this fact. However, the medium outlook is still blurry. The macro indicators tells that the picture is not as rosy as painted by our government and other analysts.

The main reason for all these malaise is the housing bubble fanned, patronised and encouraged by government itself. The bubble which started in early 2005-2006 has reached alarming proportions and now it is matter of time before it explodes on our face.

China finally understood that to develop their economy and to maintain their GDP growth they need to control their spiralling property (RE) prices. They are taking steps in the right direction. It is understood that they put some sort of restrictions on Real Estate sector and due to the measures RE prices are coming down there. Chinese inflation is also in the region of 4-5. Stock market is also not hugely over valued in China although still china grows over 8-9 percent.

On the other hand, India and its corrupt politicians does not acknowledge that the spiralling Real Estate causes such a sickening effect on inflation and economy. so far there was no meaningful discussion started in India about these menace.

Congress leaders ( It is rumoured that Priyanka Vadra has stake in DLF) has huge stake in RE. Almost all the leaders irrespective of parties have huge stake in RE. It is anybody's guess that all the black money of politicians are parked in real estate. This explains why the government is not ready to take on this sector to control the inflation.

During last down trend ( US Housing Collapse), India managed well because Interest rate was less and government could afford to provide sops to their real estate developers and inspite of huge fall in equities the RE sharks managed not to reduce the prices. One must agree to the fact that they have handled the situation very intelligently.

Unfortunately this time, it would be very difficult for them as Interest rates are at peak levels and I know clearly that government is in a fix.

  ( we will talk about the interest rate scenario and RBI dilemma in next post)

Great Blogs to follow

www.tradeinniftyonly.blogspot.com

The above mentioned blog has a very interesting and effective technique wherein the trend of the market is identified by some magic formula. It is rumoured that many guys made huge just by following this blog mechanically.

This blog follow the combination of EW analysis and moving averages.