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.

There is a pattern :)

When Narendra Modi goes ballistic RBI acts for the first time on Repo Limits.When CNN-IBN says congress is screwed due to inflation, RBI acts for the second time in Repo Limits and CRR.
http://capitalmind.in/2013/07/rbi-goes-ballistic-cuts-repo-limits-by-half-removes-crr-flexibility/
Is RBI is a political Institution? This is my first question.


We are talking about this farce of allowing banks to do easy business for quite some time now. It is ironic that RBI has found out this all of a suddenly and started tightening. I am not sure whether this will work or not? Given the fact that banks Repo borrowing touched as low as 40000 Crores in recent days. But this we need to wait and see.


Another worrying factor is that whenever RBI wants to rein  in the liquidity, it must focus on the language it uses. If they give an indication that these measures are temporary in nature, then the markets will not care a shit about the measures as they would think these measures are anyway temporary. So the anticipated effects of liquidity wont happen. RBI should ask the bloody corrupt politicians not to open their ugly mouth about these measures. If the politicians including the Prime Minister says these measures are temporary, then why bond market or forex market should react to these measures?

Finally these half hearted measures are laughable. RBI should directly raise the Repo if it is serious. Also it should come out clearly saying that it is not about curbing forex speculation. It is about curbing liquidity. Otherwise the comedy farce will continue.

www.mangoman2012.blogspot.in

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"