Better late than never

Finance Minister at it again. He intimidated RBI to cut rates by telling that 'RBI should understand their mandate in the broader sense'. What a irresponsible statement this has been from the Finance Minister of a country which is struggling to avoid a financial sunami of unimaginable proportions.

Please also read this....https://www.niticentral.com/2013/07/01/manmohan-singh-is-an-economic-disaster-in-charge-of-mounting-crisis-97761.html

Shamelessly the UPA government is trying to buy time until the elections by threatening ( almost) RBI to cut the rates. RBI is obliging so far. That is altogether another issue.

I was shocked to read that we continue to pay huge to our oil imports. Even though they oil commodity prices cooled off. An article in DNA says  http://www.dnaindia.com/money/1855943/report-5-years-after-peak-145-oil-india-pays-more-today Rupee has depreciated more than 51% than the time when oil was trading at 145 per barrel. That means we may more than what we were paying to oil few years back.

But strangely we attack gold. That is soft target and inspite of clearly knowing that people buy gold to hedge against killer inflation which caused by RBI and Government, these so called intelligents blaming people.  The opposition is not raising any issue over this gross mis management of economy which baffles me.

Better late than never. A life of few real estate agents is not important than a country. We have a raise interest rates by atleast 2 percentage and depreciate Rupee atleast upto 70 per dollar. Unless we do this, we all will go to dust.

If we dont do it on our own we will be forced to take these measures anyway.

Titbits:

2500 crores recovered in mumbai most probably belongs to some powerful person and it is anybody's guess we will never come to know who is behind this? This case will be closed in due course and we mango idiots will shamelessly live in this country......

Latest good news - CAD

Another reason for celebration for patriotic Indians. The CAD ( Current Account Deficit) has come at 6.7 which is worse than expected. While this is not unexpected for most of the real economists, economists such as Rangarajan and Montek Singh Ahluwalai have expressed surprise. These so called experts have been predicting bottoming out, peaking out things for the past 2 years without any data to substantiate their theory. Meanwhile situation has become bad to worse.

For the past one month, even FII inflows are reducing. My expectations are ( These can happen and the probability I assign is 60 - 90%

1.  Crude is gonna to go up ( Korea situation escalating which is also evident from chart patterns of crude)
2.  FII outflows will start from Indian markets ( Even reduced inflows will cause mayhem here given the CAD)
3.  Having received a left hook in February, car makers are looking to get right kick for March. This would be jolt for them. No need to talk about April which is traditionally dull month for auto sales.
4. US dollar index is going up which will accelerate nifty fall.

Open letter to Chidambaram & Dr.Subbarao - Part 1

Respected Sirs,

This letter is addressed to you because you have the authority to take decisions on many issues of serious nature facing our country. We all know our economy is in deeper troubles than what we are seeing in the media. 

• We are dependent on FII money (money comes in to share market for trading - I do not want to tell this is investment) to pay our daily bills. 
• Our industrial output is in -negatve zone for the past few months
• The car sales (leading indicator for money flow) is in -ve zone for the past few months
• Regarding current account deficit the lesser said is better. Good economists say the situation is similar to 1991(Good economists not like Ahluwalia type)
• The inflation is in double digit - I consider CPI as the true indicator and anybody who talkes about WPI is a cheat in my opinion as WPI is not considering common man like CPI. I do not have slightest of respect to a man who disagrees with this view. I hope you agree
• We are desperately raising tax bills to companies like shell and nokia and thus scaring away the investors from abroad on one hand and on other hand we are talking about FDI.
• Banks are bleeding and at this rate our banks will run out of capital in 2 years time.  The novel methodology of CDR nowhere in the world is eating our banking system and the PSU chief just to save their skin are endlessly postponing the loan collection which the basic of banking.
•  Last heard bankers realise that kingfisher is gone  case. Atleast this will be eye opener for them.king fisher also was a case of CDR, conversion to dept to equity, etc
• The findings about jobless growth witnessed in the country in nothing but a shame to the decision makers.
• The habit of shooting the messenger ( CSO) will not help. It looks very childish.
• The gold bill shows our monetary policy fails terribly.

I can write 100 more issues like this where we are terribly going wrong. But in spite of all this, we are busy cutting interest rates which is opposite to common wisdom. I just do not understand the logic behind this step.

Do you think Zimbabwe like situation will never come to India?  Are we such a blessed country?

Don't you see a possibility of a civil war in our country if couple of things goes against us. It can be some natural events like a prolonged monsoon failure.

My solution

Dr.Subbarao,

When I say our monetary policy failed, you think I refer to the 'high interest rate policy' as shouted by media and corporates. No. My view is that we haven't raised the interest rates enough to make the policy effective. From the moment you started raising the interest rates back, the corporate mafia ( I do not want to refer them as lobby) raised hue and cry and you are not allowed to raise rates freely. You raised rates at 0.25 percent per quarter and the system happily accepted and digested and it did not provide the expected cooling effect to the overheated economy.

In the process you have done a terrible injustice to the real savers of the economy and now you are paying the price in high import bill for gold and very low savings rates in GDP. Remember we scuttled all the global economic crisis only because we were savings based economy.

We convinced ourselves by attributing different reasons for high inflation on which some are laughable and inhuman.

When we talk about supply side constraints continuously that is laughable. Because we had those 'supply side' constraints even when our inflation was at 3-5% also.

When we talk about 'rural folks eating more' that is cruel because of obvious reasons.

When reserve bank talks about the speculation in gold, I really wonder what is the RBI's view on speculation on land?

Today's special - Jobless growth

India has achieved another rare distinction as an arm under PMEAC finds that the high growth India is witnessing is actually achieved without the corresponding growth in the number of new jobs. This is very new and actually not achieved anywhere else in the world. This is a new record. Chidambaram, Manmohan Singh etc can be proud.

For the sceptics we suggest still we have huge openings in real estate broking business as it seems that is the only business thriving in the country with the active support of Government, RBI, Public Sector banks and Corporates.

1.  After completing high schools students straight away join to street corner real estate agent to finish training
2.  Every year 20% appreciation will be there and so the mango people to buy assets, so it is permanent job
3. The margin is huge and can make easy money and unaccounted too

My Budget wishlist 2012

Mr. P. Chidambaram is going to present budget this year and I see the following announcements

1.  Diesel prices will be raised by 20 Rs per Litre and the all the money collected will be given to the struggling car makers who are living in below poverty line.

2.  Tax concession for housing loan will be increased to enable more sales in housing market so that the poorest of the poor such as housing brokers and the builders to eat at least square meal per day.

3.  Interest rates such as Repo rate will be reduced by 5% and the CRR will be abolished in order to bring out the money deposited wastely in banks by the super rich people of India. The poor corporates who are dying without money will be benefitted.

4. Steps will be taken to increase the real estate prices  to another 50% so that the common lazy man of India will work hard to earn more money to realise his dream of having own house. This decision is taken in the best interests of common man so that he works hard.

5. A task force will be set up to find  the other natural resources unsold in the country so that the next budget deficit can be funded.

               (to be continued)

I expect crash is near and the reasons are....

Now the economy is on steroid and most of us are used to easy money. Even with this easy money we see the GDP slowed down to 5.3. The fraudsters who caused havoc with Indian economy are still optimistic and are telling that we have 'bottomed out'.  I think this is cruel joke on Indian economy. Bottoming out means the economy reached a point from where it cannot go further down. We should get signs for economic revival. Yes. The signs of revival are important. Let us see what are the signs our fraudsters are looking at...

1. Indian government passed some 'reforms'. They are nothing but selling/opening up some of the sectors to foreigners. I am not sure how economy will improve if we allow FDI in aviation and retail sales. I think government is hoping to get some foreign exchange in the short term.

2. With all the pep talk about festival sales and all, auto sales raises a mere 10% in november that too because of low base effect by Maruti suzuki figures. We wil see the actual shocking figures of auto sales for December. Except maruti other manufacturers actually reported a decline.

3. I see the GDP figures. There is more scope for fall than raise in each of the individual components. May be mining sector may improve. The realty, finance,construction and capital goods will go much down from here. The amount which get locked in real estate is mind boggling. I don't think mango people like me will go and make real estate purchase now when nobody is sure about the economy direction.

4. Reserve bank may be blackmailed into to reduce the interest rates even though if we see the inflation figures of 7-8 percent in December also. Some bull shit reasoning will come out. I won't be surprised if government rigged the inflation figure. But unfortunately I don't think even a 100 bps rate reduction would help the economy now. But such a reduction will help to maintain the inflation at the elevated levels and it would be suicidal decision from RBI. Let us see. It would be very interesting from now on.

5. The failed monsoon is not fully factored into GDP. we cannot put that under carpet for long.

6. The imminent crash in real estate ( it is started, I heard some people who locked in real estate investments in Hosur absconded) will affect our economy in big way.

7. It will be very interesting to see how our banks are going to handle this. Now I heard that again the liquidity is started affecting banks as the banks started borrowing from RBI heavily.

8. Government and RBI's shameless act of asking people not to buy gold is shocking. When the real rate of return in paper instruments is -ve, what they are expecting people to do? This is a real shocker. To add to that Indian Mango stupid people is perfectly fine with this idiotic statements.

9. Let us see, with Indian main stock baramoter Nifty touching 6000 ( there is a theory), there may be a huge reversal.

Chidambaram puts pressure on banks

New article says Mr.P. Chidambaram finance minister this week asked public sector banks to bail out the real estate sharks. He has crossed all limits of governance and it is very disturbing to see a finance minister who is responsible for all the citizens well being stoop to such level.

The same minister immediately after assuming office in August has asked the PSB's to put pressure on builders to sell the unsold inventory. Now within few months what happened? Mango people naturally will think that some understanding has been reached between developers / builders mafia with the government.

 Without that, how can a foreign educated finance minister who is presumably well aware of the dangerous bubble engulfing the sector can ask the already struggling the government banks to bail out the developers who are the very reason for the impending economic collapse of the country? ( Long sentence ha)

God saves India.

2G Auction Comedy

 Chidambaram gamble backfired. They played with DMK and thought it is a win win for congress in 2G. Now they got egg on their face. our corporate earnings are big joke. IIP is comedy nobody with right mind believes. l All stock analysts are acting as if they are bullish because they have vested interest in keeping the stock markets up. We in for a great slowdown which will last for few years. That is how the nature pays back the blood sucking corporates, real estate sharks and politicians.... our corporate earnings bank earnings are nothing short of satyam style accounting. The worst is yet to come... C. Rangarajan and Montek singh ahluwalia are predicting inflation to come down `next month` for the past few years..... one wonders are they really that `educated` ? Do they deserve that respect they are given? god knows the answer.. w we all know Chidambaram and his plan. ..he wanted to keep the liquidity and inflation high until 2014 election.... god saves the country