Quote:
Originally Posted by vivekvan
I do not think that the prices will fall that much, as roti, kapda, makan is one of the basic needs of people. Look at the luxary items, are the prices of cars, plasmas etc down by 50%?? If there are no buyers then the builders will not start any new projects, then the supply will dry up and prices stablize. Also keep in mind the RBI help for flats below 20 lacs. Max prices will fall by another 10% in the next six months.  |
Vivekvan,
Be realistic. When prices have taken 5 years to rise, do you expect them to fall in one day? Or even in one year?
Cars and Plasma TVs
will fall by 50% - oe even more.
But not when you have money in your pocket to buy them. They will fall when a majority of people
run out of money (in the form of ability to raise loans, mainly, since majority of people buy these things with debt rather than cash) to buy these things. Don't be under the belief that this is going to be fun and games.
And people will run out of ability to get loans when they are no longer loan-worthy - this means out of job! Just try to go on your own for a while and see if Banks (which rolled out red carpet just a month ago) even entertain you if you tell them you are on your own
!
But IIP numbers are "shocking" according to the news today, but not to some people who get news regularly from the Industrial and Services marketplace. Officially IIP for Oct is -0.4% and we have entered recession too.
This bear market will not be the 12-18 month variety. Yes, the market may seem to bottom out and even rise a good amount in 2009-2010. But a double-dip in 2011-12 will see it go down even lower than the 2009 lows.
Estimates based on long-term P/E and what is called the Q ratio sees the DOW going down as low as 4500 (50% down from here). We might even see our Sensex go down that much and
more importantly see it hang around below the 10000-12000 levels for quite some time to come.
It is not the fall period that will affect us badly. It is the stagnation after that which will wear us down and seriously affect us! As you can see, during this fall last few months, most people seem to be partying as if nothing happened. This is the time when the Titanic hits the iceberg and is slowly settling down. People still are not aware of the real dangers. And even if some people have lost jobs, everyone is thinking, "this is for another 3 months. Then jobs will come back and then party time again." Also, they are dipping into savings to tide things over and so all seems hunky dory. Wait till a good number start running out of savings and still jobs do not seem to be coming back ... Then you will see the serious volume and price drops.
dblacksmith: Can you find a single "I" in this?
cheers