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......

Car sales continues to rock :)

Latest good news

1. March car sales tumbling

2. Manufacturing PMI coming down fast

3. Core sector growth goes into negative

4. Air travel is reducing.

All  4 items I mentioned above are, as I said before is symptoms of the start of a terrible down trend. Without any evidence corrupt government officials, corporate mafia and media brokers are talking about bottoming out etc... It is nothing but cheating. We need to see some evidence like higher low etc to talk about bottoming out. 

Media brokers are telling (especially Times of India) that car sales are tumbling because of high interest rates. I have one question for this broker. What was the lowest interest rate offered for car loan in India and when? think about it.

I propose some ideas to government:

1.  Government can go for a house to house survey and if any family without a car is found, they can be forcibly sign for a car loan. If they dont agree, they can be arrested.

2.  The above idea can be tried for 2nd car also. Who cares about traffic? We need to feed the car companies right? Who cares about farmers committing suicide?

Budget flaps

People who follow Indian economy closely would vouch that the budget announced by Chidambaram is hopeless. But one should understand he also cannot do anything more. The damage is done already.

He knew Real Estate is the root cause but his hands are tied as many of his colleagues and many corporates and even big banks are in neck deep shit. Now a catastrophe cannot be avoided. I feel sorry for the country but it is necessary. Think of it like a surgery.Markets understood it and promptly tanked. Next in line to get its ass whipped is Real Estate. I would like to see some banks and real estate sharks collapse soon.

Enough about my emotions. Let us analyse the budget.

1. His only aim was to show the fiscal deficit number to 4.8% to avoid the rating downgrade. He has done it. But how?  He has under provided some subsidy numbers in Oil.  But I also agree, if crude falls he will be saved. But do you think oil prices will fall?  I am  not sure. US will not allow the prices to fall because they found huge oil reserves in their country and the middle east countries also a cartel. So I am not sure crude will come down and save Mr. P. Chidambaram.

2.  It seems he has under provided for fertilizer subsidy also.

3. He has assumed huge income from divestment. This may not work out as stock market sentiment is not going to be that good to sell the shares.

4. Spectrum price assumptions also will go wrong as our corporates dont want to pay more money to spectrum.

5. He assumed robust tax income ( both direct and indirect) for next year to bridge the gaps. Unfortunately our growth nosedived from past few months and remember the Q3 of current month GDP is just 4.5. Just extrapolate and I will not be surprised to see sub 3% growth for next year.  Trust me. This will happen. Car sales nosedived. You will not believe the real estate figures if they originally report the figures. Any country which only focus on saving real estate brokers ass is doomed to fall.

To understand the above points, we need not have studied in Harvard. We know the knowledge / intelligent level of harvard educated guys already :)

Some analysts praised his budget only because he did not announce any social welfare schemes. But that is not enough.

I am not only complaining. I have the solution. It is a bitter medicine. Eat on your own. At least you will satisfy your ego. If you are force feed, you will look like an idiot in world arena. But sadly that is what going to happen.

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?

gonna to celebrate :)

Mr. Chidambaram has exhausted all his options and now has only empty promises to offer in his forthcoming budget.

The signs are peaking and the crash is imminent.

• Banks are bleeding          
• Real estate is struggling
• Job growth is stalling
• Car sales are tumbling
• Rupee is crashing
• Inflation is raising
• Money flow is stalled totally

All the above signs were positive some time back and now not all favorable  These are perfect recipe for disaster. The people who expects Chidambaram to bring some magic miracle solution for all these problems in the budget speech will be in for rude shock.  Indian economy will pay for its master's sins and this will become very ugly.

I suggested all my friends and relatives to liquidate their investments in shares and real estate. I don't know about other investment vehicles. Better be in cash.

The start will be a crash in share market followed by real estate. Then bad news will follow. Banks will start reporting more ugly set of numbers from March 2013.

are we there already??

Now the government suddenly woke up and try to make correct noises. After allowing the inflation to run amok through the country for the past 3-4 years, virtually spoiling all the economic parameters government  is now trying to do damage control.

• up to 20% fare hike in railways.
• There will be huge hike in diesel ( That is what they say, finally if it comes 2-3 Rupees, we mango people will he happy, they knew that)

Now coming back to our favorite doomsday scenario, I see increasing symptoms for crash now:

1. Car sales growth is down to 2008-2009 level. Since this time, the slowdown is much more broad based I am sure it will go to negative in 2013. Some of the car companies may shut shop and go out from India.

2.  IT companies are not doing any mass campus hiring like previous years and planning to do some   namesake campus hiring only. Pipeline of business is not too great.

3.Since government is trying to augment resources at every level, ( tax hikes are possible) people will not spend much.

4. Real estate brokers ( brokers includes banks) cannot expect robust growth this year. I think 2013 may be the bust year for real estate

5. Stock market is gonna to crash which will bring real estate down with this. This year it would be interesting to see the sellers only market without any buyers both in shares and real estate. Stocks are already showing initial signs of reversal.

6. With Rupee at 55 against USD, if rate cut comes, it is not gonna to do any good to the government or RBI's reputation. Let RBI takes a decision. But for doomsday scenario whether rate cut or not, doomsday is gonna to come

7. With no new job openings, with no new avenues to make money ( we sold all natural resources already), and without any wage hikes how can we float ponzai schemes such as real estate etc?

Comedy by Deepak Parekh

Just like the comedy episodes by Godrej, now Deepak also trying his hand. Remember this dude is the chairman of world's most valued bank. This bank is one of the 'so called banks' which sucks the ordinary tax payers money by getting funds at cheap cost due to governments policies. We will talk his credentials later.

For the week he was seen telling ' If India is downgraded, the western economies should be downgraded by several notches'

We will think about this little more:

1. First it is school boy mentality by Deepak asking to look others problems and not looking into your own problems
2. Current account deficit and fiscal deficit is growing alarmingly. So we have a problem. There is a saying ' see your back before commenting others'
3. Inflation has gone out of control partly because of the guys like Deepak who time and again come on broker channels to talk about the need to 'reducing rate'. Tomorrow if we go down, the same wolves will tell RBI could have done a better job.
4. Western economy problem is very different from India because of our population
5. Crony capitalism which benefits the corporate like Deepak is not in western countries.

Any takers??

PM woke up

Suddenly manmohan Singh woke up and said inflation is at unacceptable level. I trully amazed at this man's character. Is he really that intelligent as we think?

This has been going on in the country for past few years and it took many years for him to realise this thing. What is the answer he has for the savers who are f***ed by the governement policy of rewarding real estate brokers at the cost of Aam Aadmi?

Is he has any plans to bring the real returns for the common man who puts deposit in banks?

The reason for his sudden realization is this..

 " Now we have reached a situation where the inflation goes up automatically by 10+ percentage whereas the salary/wage hike is not happening in the same pace. Most of the money of Indian Inc is stuck in real estate as all the companies think instead of doing their core business investing in real estate would be a good bet. Now that causes strains in the system and Rupee value nosedives. In spite of record FII share investments in this year Rupee has reached 55 levels. The share of P-Notes also at record levels. Now this is scary situation for the people who know basic economics"

"Import bill is increasing hugely due to gold imports as people lost faith in this bunch of jokers who are mismanaging the country's economy. India has withered some financial sunami's only because our high rate of savings. Now since that is not there jokers are getting jerky"

" Cutting half percentage or even one percentage of interest rates will not revive growth of economy or the consumption boom as these jokers are expecting"

Why rate cut?

The people of India wants to know why there should be a rate cut from RBI? ( read it as pronounced by Arnab Goswami in Times Now :)

1.Whether the inflation gone down below 3-4% which is the real comfort zone for RBI?
2. Whether the blood sucking corporates/real estate mafia agreed to reduce prices?  Is it anybody's guess when government and RBI is floating such messages as 'cheap money', 'rate cut' how the hell the real estate developer will reduce the prices?  Are we loosing common sense?
3. Where is rupee heading?
4. Where is our export heading?
5. Is there a sign of import reducing?
6. What about our gold imports? Is it not rising only because of our low real interest rates? Is it not cheating on the poor poeple who trust on Indian Banking System?

Govt may have vested Interests, but RBI should not have.