wiseman

Economist,

Going back to the page 10 thread you mentioned, I recall your mentioning how I would bring up "my" bear case citing such outlandish things like crash in Congo or Iceland.

Fastforward to today, which is over an year later.

What you thought was a completely irrelevant thing like the Debt of a tiny economy like Greece suddenly becomes the center-piece of a potential EU collapse. Something which is seen as so threatening that most of our big business leaders are running for cover stating that they see business slowing down dramatically.

Since the time we argued, despite the enormous money pumped into the world's economy, we are looking at a very real chance of another Lehman moment - only, this time, instead of Lehman it could be entire countries like Greece or even Spain (which used to be a superpower a few centuries back!).

So Economist, in my opinion, whether its 4 years or more (the timeline is based on how much money the Central Banks print to keep the devil at bay) the world is in MUCH WORSE shape than back then. And this time around, even the FED may find it much too big to print infinite amounts of money without facing the threat of massive devaluation due to loss of public confidence in paper/fiat money.

I somehow believe that m bear case is going to come back with a bang. The bear was neither a fiction nor did ot go away. It was merely in hibernation and its just woken up, is hungry and angry!!!

cheers

WildHorse

US and Euro zones are predicting another recession in early 2013..not far from now. higher taxes is US, high unemployment in US, more foreclosures are sign of recession. obama is just enjoying the white house.

as finance mini pranab says our economy is resilient. he does not care. there will be more hungry people on the street.

and i still don't understand who are the people in real estate, buying these expensive flats.

Love4land

Real estate investment is purely sentiment based, I bought my first house for 16lacs in 2003, I was only earning Rs.10,000 per month, the bank refused to lend me as my salary was insufficient to service EMI. I finally convinced the bank to take my father's salary also into account in sanctioning loan.

So I ended up paying 18,000 EMI when my salary was 10,000. I couldn't use my father's salary as it covered our rent and other expenses. Within next few months I managed to go onsite and slowly started to settle down my debts.

Now what made me take such a big gamble?? It was confidence in Indian economy and my career growth prospects. I was sure my salary will increase leaps and bounds year after year.

Now youngsters in IT sector earning 40k per month are whining apartments worth more than 40 lacs are unaffordable but on the other hand are confidently buying apartments upto 60lacs. I think Chennai real estate hasn't reached its peak.

BTW, in 2003 IT sector was just beginning to rise up after devastating recession on 2001, which was much worser than 2008 recession as far as Indian IT sector is concerned. Infact, computeR science was no longer top favorite in Engineering colleges. Civil engineering seats were filling up faster and computer science seats were vacant even in top colleges. Most people believed IT had failed and had no future.

Love4land

It is same story here is Singapore, government is desperately trying to control property prices, apartments are getting ridiculously expensive, smaller in size and a huge oversupply is expected in next few years but property buyers are still bullish and new sales records are set every quarter.

Analysts in Singapore attribute property boom to record low interest rate, but I don't believe so, especially after seeing situation in India. It is either because all QE printed dollars are dumped into Asia or because investors are scared of excessive dollar printing by federal reserve and want to peg their investment to something more finite like gold and property instead of keeping cash.

There is no end in sight at the moment as federal reserve still believes US economy can be energized by printing more money.