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Economy
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Dear MacroEconomist
This is also a debt bubble which is not highlighted and this debt are supposed to be about thirty trillion $ where the US GDP is about 11 trillion. So what effect a $700 billion will do to a trapped economy. US banks have gone wait to watch goes next.
cheers...
In reply to:
How big is the US Crisis?
Posted by :
MacroEconomist
Are the markets world over over-reacting? Is the US crisis manageable? History provides us some idea of the quantum of crisis. US has gone through many such crises in past. The most recent being the Savings & Loan Crisis in 1989. Almost a thousand S&Ls and Banks failed during the crisis. US Treasury came to rescue with a bailout package of $160B which equals to 3% of then GDP. The situation is somewhat similar. US treasury`s bailout is $700B which is 6-7% of GDP. In 1989, the bank index fell 80% and recovered over 10 year period. Dow Jones Industrial Average recovered pretty fast. That gives a good insight. I`m pretty confident that the Bailout package will have positive effect on economy. Although, bank index will suffer. So, a couple of quarters and US economy will be alive and kicking. 
Tracked by: 0 Boarder
Are the markets world over over-reacting? Is the US crisis manageable? History provides us some idea of the quantum of crisis. US has gone through many such crises in past. The most recent being the Savings & Loan Crisis in 1989. Almost a thousand S&Ls and Banks failed during the crisis. US Treasury came to rescue with a bailout package of $160B which equals to 3% of then GDP. The situation is somewhat similar. US treasury`s bailout is $700B which is 6-7% of GDP. In 1989, the bank index fell 80% and recovered over 10 year period. Dow Jones Industrial Average recovered pretty fast. That gives a good insight. I`m pretty confident that the Bailout package will have positive effect on economy. Although, bank index will suffer. So, a couple of quarters and US economy will be alive and kicking....
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Both the moves are a part of conspiracy.
A conspimacy which is desined to help FIIs & to cheat AAM AADMI.
Let me make u clear, when market was flying at 22K almost all AAM AADMI was started investing. Imediately, that P-Note issue came in & market started drying. FIIs sold murcilaselly the SCRIPS at the much higher prices compare to their purchase price.
Now when the SENSEX is at a kissing distance from the half of what it was in JAN \\\\`08 again all the FIIs are given a golden chance to re-enter by giving them the relaxation in P-Note.
...
In reply to:
PN move good, but don't see immediate FII inflows: Experts
Posted by :
MMB Messenger
After the Securities and Exchange Board of India, or Sebi, announced the removal of limit on participatory notes yesterday, experts were of the view that the move was a step in the right direction, but there would not be immediate Foreign-Institutional Investor (FII) inflows.
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Pl save this market many life have gone,people have become bankrupt its a request to our honourable Finance Minister to save this market falling.
Pl save..........................
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We will guide as far as possible and as allowed by the boarder rules for the do`s and dont`s in the financial Crisis. This is in wake of saving millions of investors amidst of financial crisis. I am Venkat from Training8m, Queensland, Australia...
In reply to:
Economic crisis-Dos and don’ts ...........
Posted by : latikav
Dos and don’ts
• Economic crisis. market meltdown. rising interest rates. rising inflation... times are, indeed, tough. Here are 10 recommendations on what you should and shouldn`t do to keep your financial health on track.
What you should do
• Follow the news. Swinging markets and new regulatory initiatives... things are changing quickly. Each development affects different sectors differently. Follow the financial media-and Business Today`s Money section, for instance-to keep abreast of the latest developments in India Inc. and for advice on how to profit from them.
• Get your finances in order. There has never been a better time to make a budget and start paying off your debt and credit cards, personal loans, etc. If possible, transfer your loans from a bank that`s charging a higher rate of interest to one that promises a cheaper rate.
• Rethink your plans to retire. If you`re expecting to retire soon, consider holding off for a while, if possible, until things calm down. That will give you time to reassess and, if need be, modify your plans.
• Call your financial adviser. With end-of-the-year tax planning an annual ritual, now is a good time to make an appointment with your tax adviser, no matter what the economic outlook. He or she may have some advice on how to tweak your finances as you ride out the current storm.
What you shouldn`t do
• Bail out. Dumping your stocks or equity mutual funds now, when values are especially low, will guarantee that you turn paper losses into real ones. Even if there`s more downside to come, staying on course often pays off during times of economic uncertainty.
• Stop saving. Those regular contributions you`ve been making to your savings or retirement accounts are an important part of good financial discipline, and there`s no reason to stop them now. We`ve long recommended the virtue of making regular, monthly savings. Continue this habit, even if it means cutting down on other things. like the weekly family outing, or that after-office drink with friends.
• Speculate. While lower prices of shares, create opportunities, speculation can get you into big financial trouble. Avoid it.
• Take on new debt. Be careful about acquiring new debt. Economic downturns can affect job stability and investment incomes, making it difficult to determine how much debt you can handle. If you must borrow, say, to put a child through college or to buy a house, be doubly sure that you`ve examined all the options and risks.
• Stop living. Although these times demand extra caution, there`s such a thing as over-reacting. So, don`t overreact. Reflect carefully and, where necessary, adjust. But don`t stop enjoying the little things of life. You`ll only make yourself sad.
Business Today..........
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Commodities to remain under pressure even if there is CRR cut. This is largely because unless & until there is good demand from China, Japan & US, there wouldn\...
In reply to:
RBI improves liquidity by cutting CRR: Chakraborty
Posted by : MMB Messenger
Mr Amitabh Chakraborty's of Religare Securities Limited said that RBI is facing unprecedented challenges today. Liquidity has virtually dried up, especially intra-bank loan market
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Mr Amitabh Chakraborty's of Religare Securities Limited said that RBI is facing unprecedented challenges today. Liquidity has virtually dried up, especially intra-bank loan market...
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00 Bn through bailout & cash infusion into banking system in just 1-2 weeks. What more you can expect. i think Rate cut chances by FED are less....
In reply to:
Fed may cut rates by at least 50 bps over next 2 meets: JPM
Posted by : MMB Messenger
David G Fernandez, Head of Emerging Asia Economic and Sovereign Research at JPMorgan said that Fed is likely to cut rates by at least 50 bps each over the next two meetings. Also, he expects central banks across the world to start easing monetary policies.
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FIIs might reverse the flows at anytime soon, as withdrawing is overdone & India\...
In reply to:
PN move good, but don't see immediate FII inflows: Experts
Posted by : MMB Messenger
After the Securities and Exchange Board of India, or Sebi, announced the removal of limit on participatory notes yesterday, experts were of the view that the move was a step in the right direction, but there would not be immediate Foreign-Institutional Investor (FII) inflows.
Tracked by: 0 Boarder
After the Securities and Exchange Board of India, or Sebi, announced the removal of limit on participatory notes yesterday, experts were of the view that the move was a step in the right direction, but there would not be immediate Foreign-Institutional Investor (FII) inflows....
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BNP Paribas: 12-month Sensex target 9476
MUMBAI: BNP Paribas, 12-month Sensex target is 9476 and this FII
points out that the Indian market is likely to suffer the most from a
withdrawal of liquidity.
BNP has put India as the most under - performing market over the 12
months, with a recent research highlighting the difficult conditions
in the domestic economy due to a high current account deficit, coupled
with a tight monetary policy restricting the growth outlook.
Source: Economic Times...
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I think expecting FEd to cut rates by 50 BPS is nothing is speculation. Already FED has assured USD 700 bn bailout package & also now USD 900 Bn cash infusion in Banking system. So, the act of rate cut is almost done here itself....
In reply to:
Fed may cut rates by at least 50 bps over next 2 meets: JPM
Posted by : MMB Messenger
David G Fernandez, Head of Emerging Asia Economic and Sovereign Research at JPMorgan said that Fed is likely to cut rates by at least 50 bps each over the next two meetings. Also, he expects central banks across the world to start easing monetary policies.
Tracked by: 0 Boarder
David G Fernandez, Head of Emerging Asia Economic and Sovereign Research at JPMorgan said that Fed is likely to cut rates by at least 50 bps each over the next two meetings. Also, he expects central banks across the world to start easing monetary policies.
...
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WoWji,
The joke is that ,Gordon Mcbroon came up with this idea after his famous peck at Carla Bruni`s Cheek where he ended up looking like a boar taking a bite off a wild melon. He decided it was time to get some free classes in romance (ROFL) and ordered the spying.
cheers
ramji...
In reply to:
Nuke Deal Sets Ball Rolling.......
Posted by : radhika_nandlal
RAMGE,
Britan to spy on all emails and phone calls... careful.... I dont want to be under them again....
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Gold technical suggesting that gold has entered the downward trend & would see lower bottom.
In Jan. 1975, Gold was at near USD 200 per ounce.Then in Dec 1978, it closed near USD 250 per ounce. From Dec. 1978 to Dec 1979, it shown the greatest ever upside in one year to USD 750 per ounce. It was global boom time for gold. Then immediately subsequent year dec 1980-1981, it saw sharpest fall from USD 750 to USD 300, biggest ever decline. It was a global depression time. After that it spiked little bit but not sufficient, it touched USD 500 per ounce in Dec 1982.
After that Gold has shown range bound kind of movement which ranged from USD 250-USD 500 per ounce from Dec. 1982 to Dec 2002. So for 20 years, almost double the investment lets you think whether gold is safe investment or not. Every 4 years it saw bottom of USD 300-250. after dec 1982
Now from Dec 2002, Gold is seeing boomtime rally from USD 350 per ounce to USD 700 per ounce in Dec 2006. Again after Dec 2006, it saw boom time & touched USD 950 per ounce & above. Now, it has slipped to below USD 800 per ounce. Now gold has entered the global depression syndrome, the same period was seen Dec 1980-Dec 1981. & after that it remained hardly investor\`s pick for next 20 years. Exactly same technicals & global slowdown depressive mood suggest that gold will see bearish movements for atleast next 10-15 years, say not more than 20 years. If US conditions along with Europe remains bad for another 2 years then , I must say years cant be enough.
GOLD has excellent support at USD 350-USD 450 per ounce as it remained there for more than a decade from Dec 1986 to Dec 1998. If conditions go worst in terms of Us employment, bank failures, Europe depression followed by US & again asian depression followed by Europe then even most gold favoured countries wouldnt save the long term gold depression. In worst scenario Gold shouldnt go below USD 250 per ounce. Gold always take slowdown effect later compared to Equities, other commodities & even other investment horizons like real estate. So, be cautious....
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