for diliphm
- Agreed that domestic Corporate Tax rates are very high at almost 35%. This is disincentive. However, the US corporate contribute very little to taxation. Most of the taxes are paid by the Individuals. In my book I have suggested complete overhaul of taxation system.
- We can not take into billions of dollars of drug and other vice money. However, US may announce Amnesty scheme to ask all American corporations and citizens to declare their income and pay once say 25% to legalize the money, so that official money supply is more.
- Off shore is the main problem. They should de-legalize activities of all corporations and citizens operating in Off shore
- Unaccounted money portion is very small in USA. We can not take the money out of drugs, prostitution etc for officializing them

Kalidas, Hong Kong
7-10-2008...

Dear Baorders,

I have posted highly investigative article "US- A Nation on the Grill". There are many questions like instead of such mesmerizing troubles in USA, why $ is going up and Gold/Oil going down (Gold went up only yestersay)

WHAT THE HELL IS GOING ON is the subtitile of my article. Please visit my website http: //anilselarka.wordpress. com (remove the blank space)

Following are the few paragraphs of myarticle. Since it contains many graphics, it may take little more to load.o have the patience.

Quote:
Oil down, Dollar up, Gold Down
What the Hell is Going On?

A true nature of a person or nation comes to the fore, when it comes under extreme duress. A bankrupt person, corporation or a nation tries very hard to project itself as a person of extra ordinary means, contrary to facts, figures and market rumors, and go on shopping spree.

This is why billions of dollars are being paid by one bankrupt bank or corporation to the other in take over process lasting only a few hours. No due diligence, no submission of bid to the board, No minority interest, no news out – just black out.

Today’s scenario reflects “blind game”. No one knows about self or other party. The suitor does not know what he has, and the target does not know what it is worth. The vultures circling on the prey, ask for $700 billions with no questions asked.

The President of United States, Senators, and Congressmen are stunned at the attack of unknown origin and extreme brutality. This is an act of extortion of $700 billions. Call it “Blackmail of Greenback” if you like.

With worsening scenario being played out every day, no one in right mind will ever buy US dollar. Look at the box under Dollar Up and consider the following:
• Fannie/Freddie Mae got $200 Bln,
• AIG $85 Bln,
• JP Morgan got $59 billions ($30 Bln for taking over Bear Sterns and $29 Bln given to Bear Stearns itself),
• Washington Mutual Bank (WaMu) was given $230 Bln in last 3 months, all zero now,
• $673 Blns flooded into the market on Dow’s fateful day losing 778 points, and
• Billions of others not yet declared but given to host of banks, brokers and investment banks.
• $700 billions are now planned to be spent to buy the rotten and Zero value assets of the bankrupt banks.
• Bernanke opened up the empty treasury and also opened up largest currency printing press in the world, working 247365 or 24 x 7 x 365 (24 hours a day, 7 days a week and all 365 days a year) Never before in the history of United States, the dollar was printed with such intensity and also disappearing with the speed of hurricane category 6 into a giant black hole

No foreigner in right frame of his mind would at this point of time buy US dollar against his own currency, be it Euro, Pounds, Yen, Yuan, Aussie Dollar or any damn local currency.

With Dow falling, bonds collapsing, properties dumping, interbank dealing sine die, who is buying the US dollar? Why Euro, the most alternative currency for US dollar is falling, when it should have gone to almost magic 2.00 figure?

If any foreigner wants to buy stocks or bonds or $ class assets, he has to sell his own currency and buy $. Then only $ could go up. But when the foreigners are not buying $, in fact they are dumping dollar assets. In that case who is buying this bankrupt dollar?

About 10 years ago, whenever Dow rose, dollar also used to rise, because foreigners have to buy $ first before buying stocks or bonds. For the last 5 years, especially in last 3 years, dollar is falling while the Dow and Bond rising. This means that there is no demand for $ from overseas, it is only from within. The dollar so printed by FED is being used to manage (or manipulate) various sensitive commodities like Oil and other foreign currencies like Euro.

Who is Buying Dollars, Why and How?
Of course, the Americans by themselves. Not the ordinary resident Americans. They are just naïve and innocent law abiding citizens. The crooks are in the corporate world.

Some US institutions, in US and newly floated off shore corporate entities, under the ostensible authority from US administration, are now buying US$ index and shorting Oil heavily on NYMEX. They appear to have been commissioned to search and destroy the vicious circle of oil price rise which is the major cause of inflation.

This is similar to the practice being adopted during the days of Clinton Administration when the Rupert Rubin was the Treasury Secretary. He was a proponent of strong dollar policy, and during his administration, the Asian crisis unfolded, Enron was created and busted, LTCM with over $1 trillions of exposure to the market was bankrupted. His policies and practice were known as “Rubinomics”. He engineered the rescue package for LTCM with the help of local and foreign banks and brokers, raising $ 3.6 billions .....

The article is long; contains charts and flow diagram, please visit my blogsite.

Kalidas, Hong Kong
7-10-2008...

for Atheist,

If I remember well, you are from Bangalore. You did describe in narrative details, how it has deterioated. I am glad to know that my reply did help you. Get me a coffee when visit Banagalore.

Any business thrives on good product, good service, attention to the customer and above all solving the customer`s problems (called after sales service). A good appearance, friendly behaviour and smiling face (not laughing) welcomes the customer. Further, if you have a small business, the door has to be see through or open shop so that even working class people can walk through. If they find the shop behind the door, they feel the goods must be expensive. Neatness and basic cleanliness is the most important part of the retail business.

Never eat or allow employee to eat in the shop for taking lunch or dinner. Nor should one allow eating of tobacco or paan.

Biggies may not do well, because they tried to build the business just because they had the access to large amount of public funds. They do not train the staff as well as the Western corporations. There is no uniform, and if there is one, it is shabby, The employees are also having badly cut moustache or beards. The people should be clean shaven as far as possible. If there is female employee, often I find, they come in traditional style using liberal dose of coconut oil (which smells bad to many visitors). This is especially true in Hong Kong.

In Hong Kong, the retail owners pay for hair styles, clothes, make up and also force their employees to wear identification tag all the time.

Of course, one has to modify the approach having regard to local culture, but basic things should not be compromised.

Some small expenses on such basics bring in more and wealthy customers.

Kalidas, Hong Kong
7-10-2008...

for wbuffet001

I can not believe it. It is hyped up figure. Anyway, let us leave it at that.

Kalidas, Hong kong
6-10-2008...

for tally

Profit is yours if you take it. Book the profit in scrips in which you are in money and buy back same scrips in violent correction.

If RBI eased CRR, it is good thing. They should reduce rates rather than reducing CRR - reducing CRR does not enlarge credit, as most banks in India are anticipating tight money conditions ahead in inter bank market.

You should remain long on Gas stocks like Indraprashtha Gas, GAIL, GSPL, Petronet, and State Owned Refineries, Buy LIC HSG FINANCE when it corrects more in violent crash. When there are no bids for such counters, is the time to buy them at 20% lower circuits

I am not bullish for RIL - as I had mentioned before, this stock is hyped up and its real value should not be above Rs 900. It has long way to go down - but do not listen to me. Others were telling me that it will never go down and see it is collapsing.

Not because of fundamentals, but the shares of RIL must have been pledged by the promoters for their various projects. If the share value go down, they will get margin calls and if they can not meet thousands of crores of margin calls, their shares will be simply sold off in the market. That will cause the market to fall also because of their index weighting

Kalidas, Hong Kong
6-10-2008...

for slowhand22

Is liquidity in Indian market affected. it should not. Interest rates are very high now, so RBI has lot of leeway to reduce the interest rates.

Banking collapse has started already, this is what I was forecasting from 12 months onwards. US is heading towards Civil War, and I will not be surprised if national emergency is declared and election postponed.


Solution is already there, but the US Administration did not listen to me or respond to my letter. As I have stated before, I am the only person in the world who has solution to US problem. I am not boasting or not telling you out of ego. Whatever actions taken by Paulson and Bernanke are terribly wrong. They are printing their way out of the problem.

If they had listened to me earlier, they would have prevented all these collapses, in fact there could have been massive rally. I will release the letter at appropriate time.

Now that the situation has come out of hand, the solution will be more curative rather than preventive. it will hurt almost all, regardless of your country.

India will emerge strongest in the world. I am only worried about Rupee policy of the RBI and Government. They know that it has not worked for over 60 years, and they are still following the beaten path.

In India, most banks are nationalized, so there should not be any problem in Inter-bank lending. Nothing may happen to India, unless the Indian officials become super charged and panicky in which case they will hurt the nation. This is more likely to happen, if past is the indication.

Inflation is no longer a problem now - there is no money in the market. The present problem is liquidity. Indian government has most powerful tools in its armoury. The rates are inordinately high at about 10% for deposits. Even if the rates are progressively reduced by 5% in small steps of 0.5% for next 16 months, (0.5% per 2 months)

Further, next step will be to lower the taxation rate. These are all bullish scenario being set up by the present crisis. To be quite honest, I am super bullish at Indian prospect, but that time has to wait. You have to be stock specific.

A few months ago, I had asked for investing into HPCL (came down to 180), BPCL (came down to 230) when the Index was near 15000 or about. Today, the market is down to below 11000 or by about 35%, and the same stocks are up by 35% to 50% in less than 4 months.

At that time, there were many who were comparing Reliance (RPL) as best buy which was at about 172 to 192. Now it is at Rs 132, down 25%.

This is the difference between my recommendations and others blind loyalty to Ambanis, Tata, Birla, etc. I never attach myself to any stock, and allow my self to be conducted by the sheer logic and dispassionate analysis of any scrip or market.

Perhaps I am the only one today, who is superbullish about the Indian market, and you will see that in coming days.

Kalidas, Hong Kong
6-10-2008...

for drswastik

Banking collapse has begun. Even Japan has started withdrawing money from everywhere, this is why Japanese Yen despite Zero interest, is going up against US$, Euro, GBP, Aussie $ etc.

It is a home coming of all currencies. All foreign investments of FII will be liquidated either out of strategy, or requirements of funds redemption back home. It has nothing to do with the fundamental of individual companies.

When the banks collapse, the people will shift the money to treasury bonds. When they find that even treasury is useless, they buy only one thing - GOLD

WHERE IS IMF? Have you heard its name in such humongous crisis? Whenever there was crisis in Asia or Latin America, they were rushing here and there and offering many solutions on stringent terms. Now that their original mentor USA is in deep trouble, they do not utter even a single sentence.

Finally, after these currency and banks collapse, the world monetary system will be linked to Gold as standard. It may happen when the current crisis is fully played out.

Almost all troubled banks are nationalized. The only countries to come out strongly will be India (China too), France and Brazil.

India is very strongly positioned. It is least leveraged, almost all banks are already nationalized, so there will be no run on the banks, has over 30,000 tons of gold with private holders, people are now more literate now, and the country is blessed with well defined friendly weather. There is no better place than India. Most NRIs will start sending money to India from their banks (except perhaps Canada). If only RBI does not intervene to keep the rupee low, which is the most hazardous policy over decades - rupee should have been at Rs 26 now - that is biggest disincentive to NRIs

We can not predict the market even for tomorrow, so do not talk about 2010 and 2011 like an Astrologer.

Yes, one thing, The best opportunities for long term investment is coming in a few months. Brace it for that. If some FII withdraws the money from India that causes the loss of hundreds of points, that is more due to his weakness, or requirements back home, rather than the weakness of Indian economy.

It all depends how imaginative our PM and FM are. Being a good person is not enough. India needs leadership of highly imaginative persons who are relatively young (40+ to 55-) who can stay longer. We should not have leaders for whom we would have national holidays in a few years with flags hanging out at half mast.

Kalidas, Hong Kong`
6-10-2008...

Sir, What is your recommendation now that sensex is going down sharply in the past few days. Should we liquidate some holdings (with losses) or hold on? I holdthe following stocks (ashok leyland - Rs 26, GSPL - Rs 40, SpiceJet - Rs 19.5, Neyveli Lignite - Rs 78, MTNL - Rs 93). Your comments / opinion is highly appreciated Thanks Rohith...

I just dont have words to describe your contribution to all the fellow boarders..Based on your recommendations i have sold out my Reliance and invested in the Indraprastha Gas and Petronet LNG. Could you please enlighten us as to when do we see the end of this sad phase in Indian Markets and can see the light at the end of the tunnel?? Eager to hear from you sir.. Thanks a ton.. Jai Shree Krishna Avinash Desai...

Dear Kalidas I would like to congratulate you on the excellent guidance & vision you have provided to the boarders of MMB in the last one year.I have always believed full credit should be given where it is due and MMB has greatly benefitted by your sterling efforts. May the good work continue. regards wbuffett001...

Dear Sir, You are a genuis but you tend to jump to extreme conclusions. And in that sense you are a flawed genius. Regarding your above article, have you considered the role of giant US Corporations earning Billions of Dollars from their operations outside USA and not being able to bring in the profits due to US Tax Laws. Also Trillions of Dollars of Drug money earned in USA and Western Europe and taken to Offshore Tax Havens and laundered and then invested in Hedge Funds and Investment Bank Funds.As in India such money tends to get invested in Real Estate. This money has tremendous indirect influence on US Politicians and economy. May be I am entirely wrong in this but you are more qualified to judge....

Dear Sir, What is your call on the airlines sector now ? I have been reading a lot in the magazines & also TV Channels showing the Cost Cutting measures the companies are taking ? Also the Crude Prices are on a downward trend. They have also increased the fares in all the major routes. The stock prices of all the airlines scripts are still in a bad shape. Do you think its a perfect oportunity to buy them now ? If yes, what script will be a good buy ? Please comment .. :-) Thanks in advance. Regards, !!! Richie !!! Mumbai...

Kalidas Sir, Yes, I am the same Singh from Bangalore. Sir what you have analyzed is one aspect of the subject. Pardon me, but it looks like there is something else at play here, which has led to the fall in sales of the biggies when on the other hand the unorganized sector has seen a increase. Sir, I agree that staff training and presentation is very important, but the biggies had the same kind of staff a year back and same goes for the unorganized sector. Whats confusing is the reversal in sales patterns of the 2 sectors. I dont know, may be its a TEMPORARY thing, But i sincerely hope its a trend that continues.:) . Sir, It would be a honor to have coffee with you. I just hope you remember me when you visit Bangalore. ...Singh... ...

Dear Kalidas, Thanks for your detailed reply....