What is really happening in World Economy? - Page 17 - Indian Real Estate Forum

sridharchennai · 29-07-11

Quote:

Originally Posted by gayuraj

I just thought of saying this. What happens if US economy comes down or what happens if whole world comes down...Is that end of world? .. Will we stop living? .. Will we stop eating?..Isnt the answer a BIG NO?...

So to keep it simple just think about stuff which you can control and leave rest to ...(whomsoever you think :-))

HAVE FUN! Enjoy Life! Note you can live even without single penny..

gayuraj - it's easy to say, just keep it simple silly for people who do not have huge loans and for people who do not have huge EMI's to take care. But, think about people who have huge loans and EMI's and if they lose their job or their salary getting reduced, it's not simple and they can't keep it simple.

Regards,
Sridhar

sridharchennai · 29-07-11

Quote:

Originally Posted by wiseman

There is a lot of logic based on hope that, since Politicians have plundered money through land acquisition prices will not come down.

But is there data to show that say, 80% of all land and buildings are in the hands of cash-rich, black-moneyed politicians?

In my opinion (I may be wrong), though these people may have bought cheap and sold costly to builders who, in turn sold it for a profit to you and me, please note that, but for a small amount of land and building, the politician would not get rich until he SELLS the cheaply acquired land.

I suspect that much of the riches have been transfered from you and me via the builder (who took his cut) to these bloodsuckers. Now its you and me who have to pay current and future earnings to the bank and who are stuck with this debt.

Of course there are also many builders who have paid the bloodsuckers and are now owing money to the banks themselves.

If this logic is largely true, then the slide will happen when you and me start losing jobs and income which will create NPAs and it will also result in sales going down, resulting in more NPAs courtesy builders.

Ultimately the banks will repossess these homes and WILL come to market to dispose of them at ANY price.

So, its all about the jobs - and income. If this start sliding, expect RE market will start going down, both in liquidity (first) and then in price. This is obvious from various examples all over the world. Why should we be different?

Any problem with this logic? Of course, it may take time so long as money printing is being done!

cheers

Hi Wisey,

As always your opinion sounds logic and I buy your opinion. I think I should atleast get you some beers

for providing so much of information over the years.

Regards,
Sridhar

contra · 29-07-11

Quote:

Originally Posted by wiseman

There is a lot of logic based on hope that, since Politicians have plundered money through land acquisition prices will not come down.

But is there data to show that say, 80% of all land and buildings are in the hands of cash-rich, black-moneyed politicians?

In my opinion (I may be wrong), though these people may have bought cheap and sold costly to builders who, in turn sold it for a profit to you and me, please note that, but for a small amount of land and building, the politician would not get rich until he SELLS the cheaply acquired land.

I suspect that much of the riches have been transfered from you and me via the builder (who took his cut) to these bloodsuckers. Now its you and me who have to pay current and future earnings to the bank and who are stuck with this debt.

Of course there are also many builders who have paid the bloodsuckers and are now owing money to the banks themselves.

If this logic is largely true, then the slide will happen when you and me start losing jobs and income which will create NPAs and it will also result in sales going down, resulting in more NPAs courtesy builders.

Ultimately the banks will repossess these homes and WILL come to market to dispose of them at ANY price.

So, its all about the jobs - and income. If this start sliding, expect RE market will start going down, both in liquidity (first) and then in price. This is obvious from various examples all over the world. Why should we be different?

Any problem with this logic? Of course, it may take time so long as money printing is being done!

cheers

Very good logic Wiseman. Totally agree with SridharChennai above.

Inflation (oil and food mainly) and High Interest rates are the biggest concern of people right know. However a unbeatable faith of the people that the job market is strong is the only bridge which is not making the people (people includes yours truly as well

) to panic yet.

However when the faith that job market will be strong for years to come and we can take whatever risk we can, a strong job market will back us up for another 15-20 years, India is future - when this faith is broken, all hell will break lose.

Please let me continue (if it's ok with you Wiseman) about what would happen next in the logical sequence you have so neatly explained above.

When people are at risk of losing jobs or lose jobs, they will just walk out of the deal and surrender the flats they had booked to Banks. Even if someone loses a few lakhs ( let us assume around 15-20% of flat price) they will walk out as they won't be willing to stick around to pay another 30,40 or 50 lakhs for another 15-20 years. Walking out losing a few lakhs already spent is better option then trying to hold for another 15-20 years if jobs are at risk. So it's the Banks which will get the axe.

Demand has to fall drastically for everything.

Demand for expensive Flats must fall. People must start questioning and not willing to pay whatever the builder demands. Even new rules must be floated to control price rise. Why can't government impose Price Controls on flat or plot prices in middle class India . They impose price controls on other stuff, why not on flats and plots.
People must shift from cars to 2 wheelers and 2 wheelers to public transport. Why can't government provide good quality public transport or at least facilitate good private operators to operate quality buses and metros in cities.
Stop watching every shit movie in multiplexes paying Rs.100 (plus Rs.12.5 service tax) for a cup of coke every time. Watch good movies only once in a while in cinemas.
Stop paying Rs.25 (plus Rs.3 service tax)for a small cup of coffee. Stop paying Rs.400 (Plus Rs. 60 service tax)for a medium size pizza ( when I was a kid which is not very long back by the way, Rs 1.50 ( no service tax during those days) for a veg puff was considered a privilege to do kaka to my mother every day).

Everything is in our control. Sharks like businessmen, entertainers and politicians will always attract ( they will become millionaires and billionaires). We people will be looted in this whole marketing maya.

Walking out of the rat race is always better then walking out a deal isn't it?

gayuraj · 29-07-11

Sridhar, Not want to get into arguement (as I am simple and silly) but to answer you.. Who created the complex scenario (hugh loans & EMI's?)..Just check the mirror you will have the answer... What you sow is what you ...

Have fun.

sridharchennai · 30-07-11

Quote:

Originally Posted by gayuraj

Sridhar, Not want to get into arguement (as I am simple and silly) but to answer you.. Who created the complex scenario (hugh loans & EMI's?)..Just check the mirror you will have the answer... What you sow is what you ...

Have fun.

You are absolutely right, I was also speaking about the people who have got huge loans and EMI's, but sadly the percentage of people having huge loans are increasing due to pressure from society. A basic question now everyone asks to a 30 year old is do you own a flat? Did the generation of our father's own a house at the age of 30? So, the younger generation apart from their wishlist they also bend to the pressure from the society.

As far as the keep it simple silly part is concerned, it's just a one liner from Tata Docomo ad, nothing intentional.

Regards,
Sridhar

gayuraj · 01-08-11

Well it's time for reality check then.. It's better to get back to our age old strategy (i.e. Save then buy which had worked well). As we don't want to end up like US.

I didnt mind the silly part

. Enjoy.,,

wiseman · 01-08-11

I checked CAC (France) and DAX (Germany) as usual every evening and I was seriously taken aback the way both have "crashed" today!

Both opened UP with a large GAP. Then they have come down nearly 3%! DAX in particular - being one of the strongest economy in the world came down 300 points down which is nearly 4% down!!!

At least CAC is excused since France is being readied for a soft bailout now that their Finance Minister is going to be head of IMF!

Also the US market is not too happy with the Debt Ceiling deal since their markets are also down a little!

Lets see whats up tomorrow!

Markets will keep meandering aimlessly as long as the EU Crisis and US crisis keep taking turns getting heated up.

Also, the chances of QE3 may now vane ...

cheers

sridharchennai · 02-08-11

Quote:

Originally Posted by gayuraj

Well it's time for reality check then.. It's better to get back to our age old strategy (i.e. Save then buy which had worked well). As we don't want to end up like US.

I didnt mind the silly part

. Enjoy.,,

I think it's too late for the save strategy for youngsters. As far as I see in my friends circle. 90% of people who have 5 years of experience have booked a flats and have a loan amount of 35 to 40 lacs. They are paying the EMI for that, not sure our youngsters can even think of save now and buy later strategy.

Regards,
Sridhar

wiseman · 02-08-11

Quote:

Originally Posted by sridharchennai

I think it's too late for the save strategy for youngsters. As far as I see in my friends circle. 90% of people who have 5 years of experience have booked a flats and have a loan amount of 35 to 40 lacs. They are paying the EMI for that, not sure our youngsters can even think of save now and buy later strategy.

Regards,
Sridhar

Sridhar,

Whether one makes money in stocks or not there is a reason for everyone to play the market for some time at least.

It teaches people how to take practical decisions regarding what to do when a bad investment is made, what to do when the entry point is too high, etc.

People become very practical about stopping loss and waiting for a more opportune time, and learn various strategies on how to protect themselves as well as make their savings grow.

There is one strategy for the situation you see today - since most people have homes on loans, they may not be able to play the save now and buy later.

If they see a decent profit on their purchase, they could sell now, save next and then buy later. But most won't do it.

cheers

gayuraj · 02-08-11

I agree however life is a cycle. People will be forced to save as it has started happening in US. It only takes one bank to pull the plug. Hope those 90% of the folks realize.

01-08-11	#167
wiseman Veteran Member Join Date: Jul 2008 Posts: 1,772 Thanks: 3 Thanked 99 Times in 54 Posts	Something is happening in Europe right now! I checked CAC (France) and DAX (Germany) as usual every evening and I was seriously taken aback the way both have "crashed" today! Both opened UP with a large GAP. Then they have come down nearly 3%! DAX in particular - being one of the strongest economy in the world came down 300 points down which is nearly 4% down!!! At least CAC is excused since France is being readied for a soft bailout now that their Finance Minister is going to be head of IMF! Also the US market is not too happy with the Debt Ceiling deal since their markets are also down a little! Lets see whats up tomorrow! Markets will keep meandering aimlessly as long as the EU Crisis and US crisis keep taking turns getting heated up. Also, the chances of QE3 may now vane ... cheers

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29-07-11	#164
gayuraj New Member Join Date: May 2009 Posts: 10 Thanks: 0 Thanked 0 Times in 0 Posts	Sridhar, Not want to get into arguement (as I am simple and silly) but to answer you.. Who created the complex scenario (hugh loans & EMI's?)..Just check the mirror you will have the answer... What you sow is what you ... Have fun.

01-08-11	#166
gayuraj New Member Join Date: May 2009 Posts: 10 Thanks: 0 Thanked 0 Times in 0 Posts	Well it's time for reality check then.. It's better to get back to our age old strategy (i.e. Save then buy which had worked well). As we don't want to end up like US. I didnt mind the silly part . Enjoy.,,

02-08-11	#170
gayuraj New Member Join Date: May 2009 Posts: 10 Thanks: 0 Thanked 0 Times in 0 Posts	I agree however life is a cycle. People will be forced to save as it has started happening in US. It only takes one bank to pull the plug. Hope those 90% of the folks realize.