Friday, May 31, 2013

GDP will see contraction very soon

Many learning economists are amused at 5% GDP figures shown by government.

In my opinion this is jacked up figure and in reality we are already contracting. However within a year (before 2014) we will see official figures of GDP contraction.

Brazil which has gone in the same route is paying for its sins now and it is matter of time for us.

Subbarao somehow understood this and made right noises yesterday. But it is too little too late. Subbarao can pray whatever collapse has to happen after September once he retires.  But nobody can save this crazy country.

Thursday, May 23, 2013

What if QE stopped?

QE (Quantitative Easing) by US federal government is going to stop.

The very thought is giving shivers to Indian finance minister Mr.P.Chidambaram. With a mere 1-2% fall in Indian markets Mr.Chidambaram is coming on TV and almost begging to foreign investors to stay invested.
He very well know that money has no heart. Whether you like it or not we are staring at a huge crash. The people who talk about and worry about 5% GDP will see the contraction of our GDP within couple of years. Congress has to pay for its sins. Knowing the consequences now Indian Finance minister is working overtime to save the share markets. His single point agenda is to save the share market and nothing else.

Already markets are artificially jacked up by FII money which comes into India by spill over effect from Europe, Japan and US QE. If US decides to stop and the bond yields increase in US, then the money which flowed into India will go back to US in no time.This will cause a huge crash in Indian share markets.

Real Estate is un-affordable for end user
Drinking water scarcity increasing
Job opportunities are dwindling
Banks are making losses
Farmers are struggling
Power generation , the less said it is better

Chidambaram is not interested in solving the above mentioned issues. He wants to save share markets. Coming on TV to assure speculators. Good for free market.

But dont forget. This country is going to pay for its sins.

Please Mr.Raghuram Rajan...

Raghuram Rajan is an intelligent man who correctly predicted global financial crisis.

It is not rocket science to understand that he knew exactly what is going to happen Indian Economy. What I don't understand is why he is putting his reputation at stake by supporting Indian Government. Indian Government is playing a losing game. The value of Rupee is crashing day by day. Today it touched 56 Rs against dollar. It is expected to cross 60 very soon.

But under what compulsion Raghuram Rajan is saying Rupee is not under pressure?

Dear Raghuram Rajan, we respect you.. but please....

Tuesday, May 21, 2013

Mr.Subbarao - A victim of circumstances

As promised my observations on soon going to be retired Dr.Subbarao RBI Governor.

First of all, I think he is good at heart. He really wants to help so called Mango man. But he was royally cheated by the politicians. It is sad that he could not win the battle against politicians not to forget about his infamous battle against inflation.

The pressure from corrupt politicians, chamcha govt officials, corporate mafia and pimp media is enormous on him to cut the rates. He often makes right noises, but his actions are not matching his words.

Soon after the imminent collapse of Indian Economy the corrupt politicians along with corporate mafia is going to finger point Dr.Subbarao as the sole reason for the economic collapse we are going to witness within a year. I would say it would be wrong to point Dr.Subbarao alone, but he is also one of the reason. Let me elaborate.

1. Initially he was reluctant to raise the rates at required levels. He responded too late and too little.

2. Time and again he says 'we need to sacrifice growth to control inflation', in reality he never did that. His infamous act of increasing rate by 0.25% actually caused more damage. The reason being Indian set up and Indian mentality got used to this kind of rate cut the the inflation expectation was never affected by this act. To me his biggest blunder was this. He was behind the curve most of the period because of this initial mistake.

3. Another big blunder is that he failed to foresee the housing bubble and ironically he still maintains there is no bubble in Indian housing market. Maybe he is saved as the collapse of Indian housing market is expected next year, a good one year after his retirement. But he could have avoided if he foresee.


He is political appointment and spent most of his career at government side.

He is not a banker

These are the two main reasons which stopped him functioning effectively.

Out of Control

Global crisis is also worked against him

Finally he will be blamed by both the groups. After the collapse people say he had not controlled the inflation at the time it was needed. The corporates also will blame ( already they are doing) him for killing growth.


Monday, May 13, 2013

So what?

Some people may get slightly worried about today's market fall. They need not worry.

We have an full time finance minister whose single point agenda to keep share market happy. If he is not spending time on that, he is busy appeasing real estate.

So no worries.

Dont worry about the CAD, gold import etc

Wednesday, May 1, 2013

Car sales continues to decline

Mangoman is happy to share that the car sales continue to tumble.

Even with rate cut gimmicks, we cannot bring this back. The reason is different.  We are experiencing jobless growth. our growth is entirely modelled on real estate and share market.


May be chinese understood that the government is lacking backbone and government's agenda now is only to save real estate, they try to occupy some place near the border. That is a calculated move. Surely I guess china will gain few 1000 thousand KM's this time. So what, any way the areas which chinese occupy does not have any real estate value...right? dont worry be happy

Rate cut groups are active again

Now this has become a habit for the corporate mafia during each monetary review. Irrespective of what happens they go to RBI with their begging bowls. RBI governor somehow obliges. Give the WPI figures it is confirmed that a rate cut is given. Only the quantum is under discussion.

The stunning reversal last month caught many people off guard including mangoman :(

However mangoman does not believe rate cut is the solution for all our evils.
Have a look at the link above which talks about the reasons to hold the rate. Nevertheless rate is going to come. Markets will move up little bit. But I just want to share few of my observations for the past week.

1. The gold rate  - I have been telling the reduction in gold prices are adjusted by the corresponding increase in the volume of the gold import. So I dont think India is benefitted due to crash in gold prices. Further the gold recouped most of its losses in subsequent trading days.

2. Oil has given some advantage and government is also cleverly using the oil pricing to put pressure on RBI.

3. But food inflation is not gonna to come down. I strongly feel the CPI will continue to hover around double digits. Government can cheat people by showing WPI. RBI can also join government in this cheating act. However we are going to pay for this sin.

4. Yesterday Chidambaram reduced some tax for the interest paid to foreigners on their bond investments. What a irony. He rapes innocent citizens by reducing deposit interest rates and giving the benefit to the foreigners. Long live India.

Let us talk few more things after RBI's monetary review.