India's Economic Scenario

Venkat123 · #51 15th February 2008, 04:17 AM

On US retail spending increase, if you throw out oil price increase and autos, the MOM change is flat. Last week, Walmart came out and said that people are buying food using gift cards. Retail stores are resorting to heavy discounting in order to attract customers. Profit margins by retailers as indicated by earnings report is quite bleak. Next couple of weeks we will know real spending when inflation numbers come out.

The market was being pushed yesterday. Germany's GDP slowdown was completely ignored while Japan's dismal 0.9% qtr over qtr increase caused a major upswing. And there was no mention of Singapore guiding their GDP lower.

In the US, whoever bought on the news yesterday got squashed today. The last long weekend in the US did not go well with global investors. This weekend is another long weekend in the US.

Here is a fact on stimulus packages in the US. No stimulus package has ever averted a recession. It's a political toy to show the masses something is being done. Rebate checkes will not be mailed out until the end of May.

4 week average for initial claims increased 10K+ to 348K. Anything above 345K indicates a very high possibility of a recession.

Municipals are finding it difficult to borrow because no one trusts bond insurers. No one wants to buy college loans. No one wants to buy auto loans. The banks have stopped intervening because they have their own problems. The port authority ( a well known entity in the NorthEast) had to pay 20% for it's debt up from 4.x% last week.
Anything risky is being dumped. In my opinion, bad news from any one emerging market will force investors to flee emerging markets as well. Nobody wants risk. Fed rate cuts are not working.
http://www.bloomberg.com/apps/news?p...d=aLgdqC2Kn7XU

A tsunami is approaching. You can either go pick up the fish on the shore or run to the mountains.

Venkat123 · #52 15th February 2008, 08:06 AM

Greenspan warns U.S. economy near recession

Greenspan, speaking before energy executives at a CERA conference in Houston Wednesday, also said the U.S. housing market was a long way from bottoming out.

http://www.marketwatch.com/news/stor...&dist=hplatest

deepsa52 · #53 23rd February 2008, 07:02 PM

Quote:

Originally Posted by Venkat123

A tsunami is approaching. You can either go pick up the fish on the shore or run to the mountains.

I agree with that, the only reason US has not collapsed is because of the dramatic weakening of the dollar. ( Look at EUR, AUD, CAD vs USD) The Indian Rupee is also kept artificially low to stimulate exports and this is going to cause a run up in inflation. We all know that the published inflation figures are usually understated. This is likely much worse than the dot com bust.
Watch this terrifying video of Northern Rock ( one of the large British banks bankrupt and bailed out by British Govt , but US Govt does not have the luxury of bailing out!!), it shows the sign of things to come that are several times in magnitude.
http://www.youtube.com/watch?v=I20lMyYW83E

As I mentioned earlier, I think this is a secular commodities bull market , may be someone did not like that thread, that thread was deleted.( as always place your bets with "stop losses" ).

deepsa52 · #54 29th February 2008, 08:39 AM

These type of articles have started appearing in main stream media. Some prominent economists have also started using the dreaded depression word .

http://edition.cnn.com/2008/US/02/28...ary/index.html
http://www.forbes.com/home/forbes/2008/0225/036a.html

Not a good sign....and I know in US a minority of the financially savvy people have started storing emergency food supplies and precious metals , hope it does not get there. There is a good chance that global economies will be in recession, if not already in a recession, however India is large and relatively safer compared to smaller countries.