Extension for Subbarao????

some news about extension!!!!
http://www.firstpost.com/economy/no-job-extension-offer-yet-says-rbi-chief-subbarao-972127.html

It is better to go Mr.Subbarao. If you cannot withstand government pressure what is the point in getting extension and staying in the hot seat  only to see the economy collapsing day by day?

If the collapse comes after few months atleast you can say ' it was ok until I was there..now they are not able to save it' . So what say?

Chidambaram's slaves in RBI needs basic economic training

RBI panicked and rejected the bids for both sale & purchase of auctions in this week. When it signals monetary tightening for rates, it should have known that bond yields will increase. This is basic economics. I think they would have got some message from FM and FM would have got pressure from Indian Corporate Mafia.

Finally I think these jokers will see the downgrade very soon. I hope that happens as early as next month. Basic economic says you raise interest rates to save domestic currency.  But RBI, India's celebrated institution which is reduced to a sorry joker off late, is trying a novel method even Ben Bernanke would be envy. If RBI ploy had worked then it is lesson for all the central bankers to learn.

Already RBI officials made all the banks to close their short positions on Rupee/Dollar trade. Again when they say our aim to curb speculation on Rupee on RBI money, no fool will believe this. They should openly tell that we need to raise rates to save rupees. Otherwise allow Rupee to depreciate. dont be a comedy piece. People still look to RBI to save the country.

Time for Chidambaram to come on TV

Before going to today's bashing, please read the blog post of Mr.Deepak here. According to him, RBI has raised he interest rates.http://capitalmind.in/2013/07/rbi-effectively-hikes-rates-2-sets-limits-on-repo-usage/

But now do you know whether banks are continuously borrowing more than the 75000 Cr set by the RBI? I mean how it will hurt the banks unless otherwise they are having to use MSF on daily basis. What is the daily borrowings whether it is crossing 75000 Crs consistently?

So far these bankers were doing easy money business. Get some cheap money from RBI which is forced by corrupt UPA government and lend them to real estate brokers. When the repayment term comes they replan the loan repayment until idiot mangoman takes these loan as housing loan or whatever bull shit they call us. Those days are easy money are over. Now it is time to Indian bankers to do business as per the book. Identify the business analyse the margin and then lend. Since now most of the Indian business man turned brokers and not ready to accept a margin of anything less than 40% it would be a tough ask. Otherwise what can define that almost all top business house in India dabble in real estate?

Ok. Now what?  Since interest rates are going to go up it would be very interesting. Fraudsters who are ready to sell even their wives for a rate cut are going to get crushed in this financial sunami unless they understand what is real business is.

It is sad that guys like businesses of Ratan Tata who never comes on broker channels to beg for a rate cut, is not doing that good. His tata steel and tata motors are not doing good. I feel for it. But that is what life it.

Another interesting aspect I have observed yesterday wherein WPI inflation figures are released during market hours as it is perceived to be good news for market. Is it not amounting to fraud in government for they said they are going to release all these ( gdp, inflation and iip) after market hours?

Anyway Chidambaram will come on TV and will tell that what RBI has done is just a eye wash or hog wash. It is just a ploy to shore up the currency and bankers need not worry that the government and RBI will find some innovative ways to give money to real estate brokers supported by banks. Am I right?

Rupee nosedived / Desperate RBI continue supporting Real Estate Brokers

Rupee crashed to all time low of 60.72 at the end of the day today.  Patriotic Indians should celebrate the moment as both Government and RBI are busy screwing up the economy day by day. Instead of saving the Rupee the RBI is increasing the provision limit for housing loans and also allowing real estate brokers to mobilize money from foreign countries.

I see the act of RBI from 2 perspectives.

1. RBI is desperate and being pushed by FM, so giving generous freebies to RE brokers.

2. To get in the foreign exchange, RBI is opening the RE sector, so that brokers can mobilize funds from foreign countries as other businesses in India lost the ability to do business within reasonable margins. Real estate brokers being brokers in India, think that they can continue doing business at current 60-80% margin even by mobilizing money from foreign countries. In a way I am happy as this may be the final nail in the coffin.

Meanwhile markets continue to crash. Nifty crashing below 5600. Let us wait and see the nifty below 5000 within couple of months.

What is called reform?

Now since the market starting to fall people are panicking. Who all are panicking?

1. Corrupt politicians
2. Cheat corporate
3. Mafia Real Estate
4. Broker Media
5. Finally the common man who is conned/induced into investment in Real Estate by the above 4

In addition to this list, the so called financial analysts also panicking and started talking that new reforms will help stopping the fall. But in my mango opinion nothing can stop the upcoming catastrophe. Indian Government and its puppet RBI has exhausted all their options and are watching the crash of Rupee helplessly last week.

If a finance minister come on Tv to assuage investor once in a year it is normal and thereby he can command come respect in the market place. But our finance minister come on TV every week whenever there is a fall of 20 points in the index. This is comical. Markets stopped responding to his gimmicks. Last week Raghuram Rajan was given the tough task of convincing markets. Poor Man. What can he do?

Now coming back to reform stuff, I do not see any need for reform. What is needed in couple of percentage points of rise in Interest rates. A small hole in Real Estate Bubble. Some tightening of income tax rules and compliance. This is enough

Some time the so-called experts will over think and over do things and make seemingly simple things complex. That is what happening now.

Rupee / FII / Bond

Simply put now RBI is in dilemma and effectively check mated. If you had observed carefully the rate cut lobby is shutting all its holes in the body last week after the spectacular fall of Rupee. Now Subbarao will give a punch in the face for whoever asks for a rate. RBI is almost knocked out by the vicious cycle of bond returns and Repo rate.

If they reduce repo rate, FII who are already making loss will make further loss, and hence will go out of India.

If they increase repo rate, it appears atleast 75% of top corporate honcho will go on indefinite strike. ( have you ever seen Tata begs for rate cut? I did not. That is the difference between real business man and reel business man

RBI did not cut rates because they cannot cut now.

Nifty Index View

After Bernanke speech many would have observed huge FII selling in bonds and stocks. Stock selling started late but catching up fast now. Friday I saw huge sell figure from FII desk. Let us hope this continues. I am looking for some cheap puts and I think we can easily see 4500 - 4800 in nifty very soon. I mean as early as this year end.

Real Estate Effect

RBI may raise rate or not. Liquidity will dry and Real Estate sharks will run for cover. The tide is going to retreat and we will all see who is swimming naked. That will be interesting. Already I see many ' to let ' boards in many business establishments in Bangalore. Let us wait for the cleansing act and hope for a good beginning after the upcoming crash

Any shame left Mr.Finance Minister?

Please go through the below article. This talks about ( actually justifying govt move) the pricing of the FPO of government issues. We need not go into the nuances of the issue. What I am trying to talk here is about the government idiotic disinvestment policy.

http://www.business-standard.com/article/markets/analysis-is-the-government-selling-mmtc-for-free-113061300173_1.html

It is a pattern that whenever government announces an FPO, the stock is hammered in the markets. This shows government and company is in poor light. One tends to think that the market participants ( Foreign investors or brokers??) trying to take the price down before the FPO and get the stocks at throwaway price.  Should government budge to this tactics? This goes on to show that either the shares are already trading at huge premium or government is losing huge sums of money. Why we need to sell these shares at throwaway prices?

The latest share which is being affected by all these is IOC. It is one of the blue chip company and if I remember correct we were discussing about 400 Rs or more for IOC disinvestment. Even government postponed disinvestment because it felt the then price of 350 is less for IOC. But look at now. IOC is struggling at 250 and government shamelessly moving the file for disinvestment. I guess we can get IOC at 200 Rs through FPO process. As a retail investor we will get 20 shares and crores worth share will be bought by FII at throwaway price.

Now, I am seriously thinking Supreme Court should interfere and stop this nonsence. Any takers?

I expect comments pls guys.

Market is not panicking...Financial ministry is......

Rupee has nosedived into 58.15 levels during close today.

I was so so happy to see the Rupee tumbling. In a way I feel sad for wanting our Rupee to crash. But on the other hand, given the idiotic way this country is being run, I would really like to have some sort of catastrophe so that people understand the ground reality the mend their ways.

Inspite of all this one broker media has come up with a paid article and still the stupids want rate cut from RBI.  Poor RBI. They are caught between the devil and the deep sea.Now RBI with its dwindling dollar reserves bite the bullet? I presume not. But strange are the ways Indian system works. RBI may be forced into act against its wish.

Actually devil inside me tells that RBI should cut the rates so that the inflation flares up again and I wish the crisis should accelerate further so that downgrade comes from ratings agency.

Let us see what happens next..

I think in the immediate future ( 1 -3 days) RBI will come up some desperate measures to stem the fall. But having exhausted all its options it would be interesting to see what RBI will do.

Funnily finance secretary said that market panic is not warranted. As I see market is not panicked but government is. Government it seems runs to RBI and last heard there was hectic discussions. RBI is being cajoled into to do some nasty act. I know anyways desperate times needs desperate measures.

But the real estate economy for the real estate people by the real estate people is doomed to fail

A intelligent called Swaminathan S Anklesaria Aiyar

Today I read one of the most idiotic article in the main stream media. The credit goes to renowned economic writer mentioned in the title of this article.

He suggested/supported to sell all the buffer stock kept in government godowns.  In fact he suggested to export this food stock. What is comical is this...

He said India needs 32 million tonnes every year as on July 1 in stocks. Even with proposed food security bill India may not need more than 42 million tonnes. But currently India has stock about 76 million tonnes. So he suggesting to export atleast around 25 million tonnes. What is intriguing is that he said by selling 25 million tonnes we will get around 10 billion US$ and he thinks it will bridge the current account deficit.

Dear sir, our current account deficit is in the tune of 60 - 70 billion$ and this 10 billion$ is peanuts and will go into the drain in a jiffy. But the food stock if used properly or given to people can last for another year. You may have born in a upper middle class brahmin family and may not know what is food security is....

However, I never read this guy talking sense in any of his article. He never advised government to increase interest rate so that all the rotten idiots in the indian crony capitalist system comes to ground. Never. he never did that. He always supported government's idiotic moves. Gives reasons for them. Give justification for governments anti-people move.

Dear sir,,problem lies in Interest rates....

Raise interest rates by atleast 2%. This will solve all our problems. Then we need not undergo the painful process of reading your half baked,self fulfilling articles.

Holy cow Narayanamurthy

For long corporate India and media mafia praise NR.Narayanamurthy for corporate ethics standards and what not.

Murthy paid back by bringing his son into the company yesterday. One side effect is that K.V.Kamath becomes laughing stock now. But as you know, he became rick and famous only because US money printing and the boom period that followed.

Coming back to NRN's ploy, it is Ok. We Indians donot have rights to call anybody's bluff because we all have skeletons in our cup boards. If you had to arrest somebody for their crimes, we all should get arrested one way or other.

See MS.Dhoni is in newspapers today for all wrong reasons

Can anybody clarify???

We have been seeing FII money flowing into Indian markets to the tune of billions. ( for the past few days it is moving out, and that is different topic altogether).

My question is, if FII buy stocks (cash market buying) we say that money is entering into India and it is good for Indian economy. I heard we make day to day purchases (oil etc) only with that money nowadays.

I want to know what happens to the money FII's  make by trading in derivatives markets? Because the money the make in derivatives is more than enough to cover their cash market buying for the month, given the way they manipulate the Indian equity markets.

1. How that money is accounted for?
2. If they book the profit and take the money out of India, will it considered as money moving out of India?
3. Is there any control for such money like it should be invested in India again like that?
4. Will that not affect the currency exchange rate?

Last chance to Real Estate speculators to escape

Many guys do not understand the RE cycle and making fun on the people who are bearish on RE sector. The cycle normally lasts for years. As I said elsewhere in the forum, the boom period ends 2 years back and now is ready to fall. 2013-2014 is the year we are going to see huge downside.

Share markets are under tremendous pressure and falling 100 points easily with only 300 crores selling by FII's. That shows the depth and mood of the markets. Imagine if all the ETFs want to go simultaneously. Even a 5000 crore selling casue nifty to nosedive to 4000 levels.

Whatever RE rates are quoted by people now are imaginary rates. Whoeevery buys RE for the past few years are not sitting in profit as per my analysis  ( They buy at 40 Lakh and then think the price is 70 lakh or 80 lakh), we need transactions at the new price to accept.

China is very busy pricking the bubble and their inflation is at moderate level. Still they think their inflation is high. We are busy cutting rates and nobody talks about the need to prick the bubble. Actually this Indian mentality gives me more confidence that the coming bubble burst will be huge.

Corrupt government, corporate mafia, cheater builders and media brokers are in the same page regarding the bubble and recently they have successfully postponed the much awaited (even watered down) RE bill supposed to be passed in parliament.

All 2-tier and 3-tier cities real estate transactions have come to stand still. Now actually I see bulls are desperate unlike we were desperate few months back.

Basically I see RE bulls have exhausted all their options and now with the corrupt government has ran out of options and also counting the days. I don't think RE can be saved.

People who bought house should do fine. But whoever invested hoping for a killing would do good if they escape with whatever profits or minimal loss.

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?

You read it first here - great Indian bank crisis

If the indications are true and if my assumptions hold good, we are in for our worst nightmarish scenario with Indian Banking system.

For the past few days(rather weeks) the news we read about Indian banks are not at all good. Most of the banks in spite of reduction in repo rate. There are serious mismatches in the ALM books which is not surprising given the fact that the bank chiefs are trying and fighting over one another to keep the Real Estate Broker community happy. Instead of moving and make things happen, almost all the Indian bankers are expecting divine intervention to continue to real estate bull run. But sadly, the story from the ground level is very pathetic.

1.  http://www.business-standard.com/article/finance/banks-stare-at-mtm-losses-as-bond-yields-surge-113032700090_1.html

2. http://economictimes.indiatimes.com/opinion/guest-writer/indian-banks-caught-in-liquidity-squeeze-or-is-it-a-liquidity-trap/articleshow/19230219.cms

The very fact that the tumbling car sales caught these people unaware shows it all. I see this is not an one off incident and we are going to see many more. In my opinion it is only a trailer shown to us. The main picture is yet to begin.

You can extract the rate cut from RBI by hook or crook, but the real economy may not oblige you which is evident from the fact that there are mismatches in ALM  and some banks had to raise interest rates.

Monetary Review 2017 and more.....

These are the probable scene which will be witnessed in 2017 Monetary Review

RBI has reduced the CRR further and the CRR now stands at -3%. That means  RBI will give an extra  3% of the banks total deposits to all the banks to overcome the liquidity issue.

SBI chairman Pramod Chapri so upset about RBI with the minus 3%  CRR. He argues RBI should give unlimited money to the banks without any interest cost and the CRR itself is a  idiotic banking practice followed centuries ago.

Repo Rate is reduced further and now stands at -4%. This means mango men ( You and me) have to pay 4% interest to keep your money in the bank deposit.

FICCI President Podi Godrej reportedly unhappy with RBI, that the repo rate is reduced only up to 4%. He wondered how industry will grow if the repo rate is -4. He wanted RBI to reduce the rates further.

Karthi Chidambaram ( he would become finance minister by then) expects RBI governor Ramarao to act responsibly to reduce rates further to -10%, so that poor Kumbani's and Jehindra's can eat atleast a square meal per day.

In a separate news, the CPI inflation touches 23% and the WPI inflation is at 12%. Taking note on this inflation figure PMEAC chairman sundarrajan says the WPI decreases by 0.00002% which actually gives room to RBI to cut the rates further. Further he noted that the price of jet engine reduces by 100%, which is what we need to look as a sign of cooling inflation.

Planning commission deputy Chamcha singh puts blame of rural people. He says rural people has become more arrogant these days and started eating decent food for 3 times per day which puts more pressure on the inflation. He also expressed dismay about the fact that poor people started drinking coffee everyday. He also says government is taking effective steps to arrest this trend.

Meanwhile real estate continues to thrive and the price of a single bedroom flat is 10 crore even though 100000 crores of apartments still vacant in the country.

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)

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.

Subbarao blinked finally - 1

The tug of war between government and RBI ended today as RBI governor D.Subbarao conceded by lowering the Repo rate by 0.25 even CPI is over 10% and WPI is over 7%.   Whether it is pressure, threat, coax, cajol or whatever from Chidambaram, governer obliged with the rate cut and this is not at all good for the common man. Subbarao ditched the common man for real estate mafia.

. Normally with every review RBI used to talk about inflation only. Now they understood this is not only about inflation. The mismanagement started affecting CAD and Rupee value also. One need not to be economist to understand all this basic things. Interestingly they seems to read my blog and wrote something about the fall in the savings rate in India.  RBI included all these things in their review. But instead of raising the interest rates they reduced.

Now let us see what would happen next:

1. As I have been maintaining, the 0.25% is not going to save the ass of corporate mafia. The real estate mafia has to pay for the sins. I do not think any body would go and buy apartments or flats only for 0.25% or 0.50% rate cut. People should have real money or jobs. With new jobs are hard to come by I am not sure.

2. A well known Bangalore builders defaulted in corporate debentures. Hopefully a start is made. I love to see at least 50 medium builders to bankrupt to start with. These idiots are thinking they have land bank which is valued more than the loan amount. .They value all these land banks at CMP at which rate nobody buys :) so I don't believe their price. Let us see how the creditors get back their money.

3. Chidambaram has placed all his cards on the table and forced RBI also to put their best foot forward. Since they cannot do anything more to pep up, I think they will run out of steam.

All problems solved now - expect rate cut

The week gone by was very interesting.

A lacklustre result from Infosys caused the share price to jump above 20% in a matter of couple of days. Ironically this company is on the downhill.

The WPI inflation of 7.2 % is greeted by market although the CPI inflation of over 10%. Everybody discounted the rate cut by RBI. Now it is the question of whether it is .25 or .50.

Mangomen in the street is made to believe that it is in his best interests the rate cut is going to be done. Because government thinks every mango man in the street is invested in stocks and real estate. The mangomen who are not invested in these two assets classes are not having a say  in government policies and officially raped by Indian government. Sadly majoirity of population falls here. So effectively Indian government is working against majority of its people.

Now coming back to RBI, Subbarao would have realised how dangerous it is to commit to rate cut on a certain date. Now he has fallen into his own trap and will be forced to cut rates January end. And here after every review he will have to cut rates to stock growth. How pity?